21st Century Business Herald reporter Liu Qian, intern Li Qian, reported from Wuhan
Cement supply is facing contraction, and cement prices are rising rapidly, which is worthy of attention.
It is reported that the Zhejiang Provincial Development and Reform Commission issued the "Notice on Launching an Orderly Electricity Consumption Plan" on September 27. According to this notice, Zhejiang launched a B-class orderly power consumption plan from September 28, requiring enterprises and equipment, including the cement industry, to implement the "weekly fault peak avoidance (line rest)" system according to the published power supply line rotation schedule, and at the same time implement peak avoidance electricity every day.
According to the statistics of Tianfeng Securities, 11 provinces have adopted or will soon adopt power curtailment and production restriction requirements for cement enterprises, and the production capacity of these 11 provinces accounts for 50% of the national cement production capacity.
The tightening of market supply has brought about a sharp rise in cement prices. According to the price adjustment letters of a number of cement manufacturers, the reasons for the price increase are mostly the superposition of dual factors, that is, the high price of bulk raw materials such as coal and the inability to produce normally caused by power rationing. In addition, some manufacturers have increased prices due to market marketing conditions and comprehensive production cuts.
Guo Hui (pseudonym), a cement dealer in a certain place in Zhejiang, told the 21st Century Business Herald that the average price of P.O42.5 bulk cement in some parts of Zhejiang has exceeded 700 yuan / ton, "even so, there is not necessarily enough to get the goods, and some factories have directly stopped production."
<h4>Suspension of production during peak seasons</h4>
"Since September 10, more than a dozen power outage notices have been received." On September 28, the head of a cement production enterprise in a certain place in Liaoning introduced to the 21st Century Business Herald reporter that the initial power ration was from 4 pm to 8 pm, and then more and more time periods were required to cooperate, and now basically from 1 o'clock in the afternoon, employees can go home from work.
The person in charge said that the power limit has been continuously strengthened, and the main scope of implementation has not changed, all of which are high-energy-consuming industries such as cement, steel and non-ferrous metals. This was the peak season of the industry, and now half of the workers in the factory have taken the National Day holiday in advance.
In some southern regions with stricter energy consumption control, some cement production enterprises "start work for half a month and stop for half a month". Chen Liping (pseudonym), the head of a company, showed the 21st Century Business Herald reporter the notice of the power sector that the next three months will stop production for half a month, every 10 days for 5 days, "at least until the end of the year, I don't know if the follow-up will increase."
In the face of the double increase in the shortage of thermal coal supply, the suspension of sales and price increases have become the choice of many cement production enterprises. Chen Liping told reporters that originally the high price of coal coupled with the tight supply, enterprises did not dare to take the volume of production, afraid of increasing income and not increasing profits, and could not complete the performance indicators at the end of the year. "The inventory is suddenly pulled very low, and after the cost is passed on, the price naturally rises."
According to Chen Liping, the cement industry from September into the peak season sales, the plant will generally reserve ten days of cement inventory, after the power ration, the inventory will be consumed in one or two days, basically in the situation of immediate production and sales, or no supply. Production can not keep up, pull goods at the door queue, the factory can only stop selling some varieties of cement products, priority to ensure the supply of large customers.
Bao Rongfu of Tianfeng Securities analyzed that under the pressure of dual control of energy consumption and shortage of thermal coal supply, cement production in 11 provinces has been restricted, and the total production capacity accounts for up to 50% of the country.
At the end of August, Guangxi took the lead in issuing production restriction measures for local cement enterprises, and then Guangdong, Yunnan, Jiangsu, Ningxia and other provinces also issued production restriction notices, of which Yunnan had the largest production restriction, requiring cement production in September to be reduced by more than 80% on the basis of August output, and all cement enterprises in October-December staggered peak production time of not less than 40 days. On the other hand, under the pressure of thermal coal supply shortage, some non-energy dual control first-level warning provinces such as Guizhou, Zhejiang, Shandong, etc., have also begun to implement production restrictions, and hunan and Anhui have recently issued emergency notices for orderly electricity use.
Since cement is basically produced and used locally, at present, the areas with large power rationing and production limitation have the highest price increase. As of September 24, cement prices in the Yangtze River Delta, Sichuan-Chongqing, Lianghu and Yunnan-Guizhou regions have all risen by more than 200 yuan since the end of July. A number of industry insiders introduced to reporters that there are spectacular scenes of long queues to buy cement in many places, and some dealers have the highest quotation of more than 1,000 yuan per ton, and dealers with relationships have tried to hoard goods.
<h4>Short-term prices may continue to rise</h4>
"Prices this year are like a roller coaster." Qin Shizhang, a cement dealer in Guangxi, told the 21st Century Business Herald that cement prices, which have rarely fallen since May, bottomed out in July, and rarely opened an upward channel, and rose sharply, breaking through historical highs.
The ups and downs in prices have put pressure on downstream building materials companies. Recently, Hubei, Zhejiang, Jiangsu, Anhui and other places issued early warnings of the risk of price fluctuations of building materials, reminding major construction enterprises to fully consider material fluctuation factors when bidding and quotation, contract signing, and material procurement, and take effective measures in a timely manner to actively prevent the project cost risks caused by price fluctuations.
A building materials company in Hengyang faced the dual pressure of no cement supply and power rationing, which raised the supply threshold. The person in charge of the company showed a notification letter to reporters showing that the cement price reached 700 yuan / ton, and there is no cement supply, it is recommended to stop production for one month and then supply materials, if you must really need to supply materials, please pay the payment according to the contract, and negotiate the current supply price.
On September 22, the China Cement Association issued the Notice on Stabilizing the Market Price of Cement in Liangguang, Jiangsu and Zhejiang Regions and Yunnan (hereinafter referred to as the "Notice"), requiring major groups to take measures to increase logistics scheduling, fill market vacancies, and stabilize excessive price increases in local areas. The "Notice" pointed out that since entering September, prices have risen sharply, which is not in line with the high-quality development requirements of the structural reform of the supply side of the cement industry.
Cement prices, which have risen too fast, have also attracted the attention of local governments. Recently, the Guangxi Liuzhou Municipal Market Supervision Bureau organized a special inspection of the city's cement and other commodity trading price behavior, focusing on the illegal acts of collusion with each other and manipulating market prices; fabricating and disseminating price increase information, inflating prices, and promoting excessively high commodity prices; in addition to production for self-use, exceeding the normal storage quantity or storage cycle, hoarding a large number of commodities with tight market supply and abnormal price fluctuations.
Kong Xiangzhong, executive chairman of the China Cement Association, said in an interview with the 21st Century Business Herald that the purpose of double control is to increase the proportion of green energy and promote enterprises to carry out structural adjustment and transformation and upgrading. However, some places do not understand the dual control enough, and when the assessment time comes, they increase the policy layer by layer and take relatively drastic measures to limit the growth of energy consumption. At present, the normal production of many cement enterprises has been affected, which is not the purpose of dual control.
Kong Xiangzhong said that some leading cement companies have a layout throughout the country and are ensuring market supply by allocating production capacity in various districts to stabilize the rapid rise in local prices. In the short term, the increase in coal prices offsets most of the profits of cement companies, and the power ration allows enterprises to passively reduce production, and "cement prices may continue to rise."
The data shows that while cement prices are rising, coal prices have also continued to rise. At present, the market price of thermal coal (Q5500, produced in Shanxi) in Qinhuangdao Port is as high as 1503 yuan / ton, 908 yuan / ton higher than that of the same period last year, an increase of up to 153%. According to industry estimates, the impact of rising coal prices on the cost side of cement companies is about 118 yuan / ton.
"It is expected that areas with smaller increases in the early stage or low price levels may continue to make up for the rise in the later stage." Bao Rongfu analyzed that the fourth quarter is the traditional peak season in the south, and the demand still has some support. On the other hand, the intensity of production restrictions in some provinces may be marginally slowed down, but the production restrictions will not be completely cancelled, and the market supply gap still exists, so under the market law, prices will continue to rise.
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