According to Zhito Finance APP, cement stocks experienced a broad decline in the afternoon, as of the time of writing, cnbm (03323) fell by 4.76% to 3.2 HKD; westchinacement (02233) fell by 3.01% to 1.29 HKD; conch cement (00914) fell by 2.8% to 20.85 HKD; cr bldg mat tec (01313) fell by 2.55% to 1.91 HKD.

On the news front, in the first three quarters of this year, the cement output hit a new low due to the sluggish real estate investment and the continued slowdown of infrastructure investment growth. According to data from the National Bureau of Statistics, from January to September 2024, the new construction area of houses nationwide decreased by 22.2% year-on-year, with the new construction area of residences declining by 22.4%; nationwide infrastructure investment (excluding electrical utilities) increased by 4.1% year-on-year, down 2.1 percentage points compared to the same period last year; cumulative cement output of large-scale enterprises nationwide was 1.327 billion tons, a year-on-year decrease of 10.71% (on a comparable basis), marking the lowest value for the same period since 2010.

HSBC Research published a research report indicating that mainland cement prices continue to rise due to supply controls and seasonal demand improvements, while new capacity replacement regulations impose stricter limits on excess production, which will help accelerate the integration of the industry. The bank expects cement demand to continue to decline; however, there are positive and sustainable changes on the supply side, mainly due to the willingness of industry participants to cooperate to maintain reasonable gross margins, which will bring upward profitability for the fourth quarter of 2024 and 2025, and it is anticipated that more government-led supply control policies will be introduced.