Price increases, price increases and price increases, and cement prices have risen dramatically throughout the country since august。
In ji cai, cement has gone up seven times in the past 70 days, reaching a record high of almost 130 per cent by 11 october。
Pressure transfer to downstream concrete production and construction enterprises. According to several local practitioners, downstream risks are increasing。
It's going up to history
On the evening of 2 august, the concrete company zhou benting (alias) received a price change letter from the upstream cement plant, which increased the cement by $40 per ton. At first, in his view, the increase was a conventional cyclical adjustment and was not too careful。
Who knows, it's just the beginning. 40, 50, 60 ... On 25 september, cement was historically upped by 100 dollars per ton。
By 11 october, the average price for cement purchases by the cement company, which was running on weekdays, had risen from $310 per ton on 2 august to $720 per ton. The price of cement purchased by some construction enterprises has also exceeded $800 per ton, an 80 per cent increase over the same period。
“cement prices generally rise from mid-year to the second half of the year. But this surge since august this year has not only been the largest single-time increase in the history, but also the highest rate of price adjustment ever。
According to data from the china cement network large data centre, the national cement price index (cempi) was 208. 21 on 11 october, compared to 146. 75 in the same period last year, an increase of 61. 46 per cent over the same period。
As a result of this nationwide cement boom, hunan is a core price increase. At the subregional level, the central and southern cement price index (cempi-sc) 244. 91 on 11 october, compared to 153. 51 per cent over the same period last year, an increase of 91. 4 per cent。
Coal prices and electricity restrictions have caused price hikes
This year's cement market is a big boom。
This surge was preceded by a slowdown in construction projects from april to july of this year due to weather, security inspections, etc., combined with tight real estate regulations, tight demand for cement markets and a continued decline in average cement prices across the country。
“cement prices in the first half of the year are the lowest in 10 years and are sold quickly.” according to the director of a cement plant in jizhou, the cement industry has been on the ground for five years since 2016, with a successive decline causing the industry to suspect a “closure point”。
However, as coal prices continued to rise, the average price of cement began to pick up at the end of july. According to the china cement institute, by the end of september, the national average current price for powered coal was $1710 per ton, an increase of 179. 75 per cent over the same period. According to the above-mentioned officials, the coal-to-work price for cement production in factories currently stands at $1,800 per ton。
In addition to the rise in raw materials, such as coal, restrictions on electricity production have been one of the common reasons for the increase in prices in recent pricing letters from many cement enterprises。
The last 10 days of september were the highest in the current round of cement prices. Previously, hunan issued a power-limit notice specifying that 24-30 september would be a 24-hour “double-control” measure for electrical power and capacity in the state of orderly electrical warfare。
“cement, which is a highly energy-intensive, over-capacity industry, is the focus of energy consumption `double-controlled', with electricity-restricted production tightening the supply of cement, and some cement enterprises starting to limit their sales.” jockey says。
In addition, industry analyses show that the production of cement in guangdong and guangxi has declined sharply because of energy consumption, with some traders taking goods from hunan and guizhou to guangxi local areas, and with additional out-of-cement shipments in the hunan region, further reducing stocks。
The ministry of labour and industry and the ministry of the environment jointly issued a circular on the production of faulty cement products in the cement sector, which was to be implemented in the four quarters from 16 october 2021 to 15 march 2022, and the base for the production of faulty cement clinkers in the cities of changyang, changde and yiyang was 75 days, with no less than 25 days for the fourth quarter of 2021。
A general industry analysis suggests that the late supply of hunan cement will be further restricted and prices will operate at high levels。
Downstream companies have suffered serious setbacks
The concrete industry is the largest market for cement, and business pressure is multiplying in the face of the historical surge in prices. According to public information, a number of concrete mixing stations in jiangsu, sichuan and guangdong are now closed。
Cement-led prices have also risen for both mineral and gravel raw materials for concrete, which have increased five times, by more than $300 per ton。
Even though raw materials have gone up, few concrete firms have increased their prices at random – industries with excess capacity, low-priced dumping, blind advances, bad competition, etc。
In the last two years, the market demand for pre-compression concrete in the town of jizhou has been over 5. 7 million cubic metres, but the capacity of the city is currently over 20 million cubic metres. In addition, there are 22 highly qualified concrete enterprises in the county, with an industry-wide receivable of over 2. 2 billion yuan, representing almost 80 per cent of the value of production。
"father to rise, afraid to lose a client. Even if it goes up, less people pay. It can only digest part of its own teeth, and the customer bears part.” zhou was concerned that concrete prices would not cover the increase in raw materials, that profit margins would continue to decline and that the financial situation of the concrete sector would deteriorate further。
Construction and construction enterprises have also suffered. Although, in accordance with our provincial policy, there has been a continued sharp increase and fall in the price of labour, materials and shifts, which has allowed the contracting parties to enter into a supplementary agreement to adjust the price differentials, the current pressure is already heavy as in tarzan。
“the steel has increased by $2,000 per ton in a year, labour wages and equipment rental costs are rising, financial costs have increased by half, and advances are increasing.” according to the head of a construction enterprise in the city。
Don't stop. I'm afraid i won't be able to raise the price. Stop
The confusion spread in the industry。
