Since May, cement prices have risen in Northeast China, Central China, South China, and Southwest China. As of last Friday, the average price of cement nationwide reached 372 yuan/ton, up about 12 yuan from the beginning of the month, a record high since the second quarter.
Since the April 30 Politburo meeting set a more positive policy tone for the real estate industry, various ministries, departments and local governments have been actively deploying and implementing it. Relaxed purchasing qualifications and credit policies are expected to further stimulate the market's demand for home purchases.
As the cement industry ushered in the broadest and most vigorous price recovery since 2024, the agency believes that the bottom of cement prices is also being initially established.
According to Digital Cement Network, as of May 24, 2024, the average price of cement nationwide was 366 yuan/ton, +6.5 yuan/ton compared to the previous month, and -45 yuan/ton year on year. Due to the imminent implementation of the new cement standards, most regional companies are actively promoting price increases in order to increase transmission costs, and it is expected that prices will continue to strengthen in the later stages.
Since May 20, some regional markets in East China, Central China, Northeast China, Southwest China and Northwest China announced price increases of 20-50 yuan/ton.
Although demand is still not the core driving this round of price increases, Huatai Securities Research believes there are four important differences worth paying attention to:
Compared to the repricing led by the Yangtze River Delta market in early April, this round of repricing has a wider scope and greater intensity;
Early prices in some peripheral markets have been repaired, laying a better foundation for price implementation in core markets;
The determination to lead the leading enterprise is stronger;
Clinker prices are increasing more strongly than before, and it is expected that independent grinding stations will better curb market disturbances.
It is expected that the implementation of this round of price increases will be more solid. While promoting marginal improvements in the profitability of the industry, it is also expected to bring better revaluation opportunities to the sector.
Companies related to the cement sector:
Asia Cement (China) (00743), China Resources Building Materials Technology (01313), Conch Cement (00914), Huaxin Cement (06655), China Building Materials (03323), Western Cement (02233)