Post-financial crisis in China's cement market

In 2011, China's cement industry did not usher in the imaginary glory. Eliminating outdated production capacity did not achieve the expected results. Instead, it was affected by the downturn in the infrastructure construction such as the low-speed rail downturn and the low operating rate of affordable housing. The cement price in the industry continued to fall, and it was strong in the financial crisis. The high cement market has not ushered in the post-financial crisis era. As of the beginning of November 2011, the national cement market price continued to decline month-on-month, with a margin of 0.35%. The falling areas were mainly in Beijing and Hubei provinces, with a margin of RMB 20-30/ton; the price increase was in Chengdu, Sichuan, with a range of RMB 10-20/ton. The main reason for the increase in cement prices in Sichuan is that cement companies want to increase profits through price adjustments. It can be said that the overall cement market in 2011 was in a weak state.

The main reasons for the weak demand from the cement market in which Shangpu consulted building materials analysts believe that the demand should have increased in the post-financial crisis period are as follows:

First, the downturn in the real estate market. In 2011, the real estate market was at the edge of price cuts. Although major real estate developers did not relent their efforts, most developers had contracted their battle lines in the first half of 2011 and had adopted various promotional methods. Real estate is the most important downstream industry in the cement industry. Its downturn directly hit the cement industry.

Second, China High Speed ​​Rail. The major high-speed rails that have just been put into operation in 2011 have been involved in frequent accidents. In November, the scheduled opening of the Han-Yi High-Speed ​​Railway on the Shanghai-Hangzhou-Kunming Rapid Transit, which runs through China's eastern, central and western regions, was postponed. At the same time, three cross-provincial high-speed rail lines in Xiamen, Shenzhen, Nanguang, and Guiguang are in a state of suspension or slowdown. In addition, currently, in addition to the special railways such as the Lahore Railway (Lhasa to Shigatse), most of the railway projects under construction, including the high-speed rail, have been fully in the "temporary deferral" state of semi-cessation. This is undoubtedly equal to worsening the cement industry.

According to the "China Lime and Cement Industry Analysis and Research Report 2009" published by Champ Consulting, although the cement market in the era of financial crisis will have some difficult times, such as various aspects of the industry market saturation, stagnation and other unfavorable aspects, but because cement The industry is the basic industry for national construction and there is still a certain market prospect in the future.