Supply and demand imbalance, real estate correction is slow, and the rainy season is approaching, the mainland cement market inventory ratio is rising. Xijin Taiwan Cement (1101), Asia Cement (1102) and Xinda cement plants Cement (1109) looks at the mainland operations in the second quarter The market will remain “conservative”.
With bleak demand, overcapacity, and the breakdown of competition and cooperation, prices in the mainland cement market fell by more than 10% on average in the first quarter.
Mainland Digital Cement Network predicts that cement prices in Guangdong, one of the main business markets in mainland China, may enter a significant downward trend after the Tomb Sweeping Day.
At present, operations in the mainland cement market account for about 30% of Taiwan Cement’s overall revenue. Due to the imbalance between supply and demand and low prices in the mainland cement market, Taiwan Cement’s contribution to land cement plants major has decreased for two consecutive years.
Shipments have decreased and prices have decreased. According to Asia Cement’s financial report, in 2023, Asia Cement China’s revenue and operating profit will decrease by more than 20%.
In Hubei and Jiangxi, where Asia Cement China’s main business areas are located, at the end of February this year, the downward price trend has not changed.
Under the real estate correction made by local governments in mainland China, although the sales area, real estate investment, and construction area that just started last year rebounded compared to 2022, Yashi believes that mainland real estate has entered a slow L-shaped recovery, and demand for cement this year is still weak. , the operation in the mainland market is expected to be conservative during the first half of the year.
Revenue from the mainland market still accounts for more than 50% of Xinda Cement’s overall revenue; since this year, cement prices in Nanjing, where Xinda’s mainland operating market, have exceeded 20%.
The progress of large land real estate projects under construction is slow, cement supply still exceeds demand, and cement prices are expected to fall in the second quarter. Xinda Cement’s mainland market operations in the second quarter are expected to be “not booming during the peak season.”
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