Cement Price Rise Reasons Analysis

Abnormal cement price in April~May 2020?

"After more than ten years of cement trade, I witnessed for the first time that cement prices can rise in a wide range in May!" A cement dealer expressed his emotion.

This year's cement price is indeed a bit "abnormal". After the Lantern Festival in previous years, local cement prices have gradually recovered. However, until the traditional peak season of August ~October, the national cement price has shown the characteristics of large increase and wide coverage. Since April 2020, the national cement price has become more and more "hot".

On the whole, the cement prices in most regions are generally rose in May 2020, greatly different from the stable and declining market conditions in previous years. Recently, the cement delivery rate of the whole country has been rising rapidly. More and more cement enterprises have more than 100% delivery rate, and even a rare situation of "sales exceeding production" has occurred. Some areas have been queuing for cement vehicles.

Is the recent rise in cement prices really reasonable?

Due to the comprehensive effect of internal and external factors, the rise of cement price is in line with the common sense.

Supply and demand affect the price. The rise of the national cement price is largely due to the increasing market demand for cement.

Although coronavirus pneumonia has a great impact on the economy, the cement industry is also affected. But the demand for cement is relatively rigid. The overall demand for the whole year will not be changed too much due to the downtime. Since April, the pace of resumption of work and production has been accelerated all over the country, so the concentrated outbreak of cement demand appeared.

In addition, a series of stable growth and livelihood protection infrastructure investment policies issued by the state and local governments also boost the growth of cement demand. "All regions are speeding up the construction of major projects, and the amount of cement needed is also rising. A wave of rising market is coming."

In addition, in recent years, under the influence of various factors, such as off peak production, environmental protection and production restriction, and industry self-discipline, the price of cement is in the state of high and stable. At the time of coronavirus outbreak, most provinces in the north are in the period of staggered production and shutdown, with low storage location and long-term production stagnation. It is difficult for the inventory to meet the cement demand of the centralized outbreak for a while, resulting in the phenomenon that "supply exceeds demand" in the market, and the cement price is also rising.

To sum up, with the centralized release of demand and limited supply, the overall rise of cement price is in line with the market law.