Seasonal stagnation pulls down the cement industry

In the first three quarters of 2011, the cement industry set a record in performance. It is reported that in the first three quarters, the cement industry listed companies achieved an operating income of 113.24 billion yuan, a year-on-year increase of 51%, and the net profit attributable to shareholders of listed companies was 18.208 billion yuan, an increase of 133% year-on-year; of which, the net profit in the third quarter was 6.775 billion yuan, with an increase of 107. %, accounting for 37% of the industry's net profit in the first three quarters.

Demand for cement in October improved compared to the previous month, but the overall economy was slightly lower than the same period last year, which is basically consistent with the industry’s previous expectations. From January to October 2011, the cement output of enterprises above designated size nationwide was 1.704 billion tons, which increased by 18.0%, and the growth rate was still rapid. In October, the output was 19.063 million tons, which was an increase of 16.5%, and was a 0.17% increase from the previous month. The single month of 180 million tons in the month has an increase of around 5%.

The nominal growth rate of investment in fixed assets was the same as that in September, and the actual growth rate rebounded. From January to October 2011, the national fixed asset investment (excluding rural households) reached 24.14 trillion yuan, an increase of 24.9% year-on-year, and the growth rate was unchanged from the previous period. In October, solid investment increased by 1.34% from the previous month. In addition, considering the declining trend of inflation, the growth rate of actual solid-propelled investment will increase slightly.

In terms of prices, the national average price of cement continued to decline slightly, and a few regions experienced seasonal recovery. At the end of October, the national high standard cement price dropped to 399 yuan/ton, breaking 100 for the first time in the year, only about 9 yuan higher than the same period of last year, and the average price in early November was further lowered to 397 yuan/ton, and the next week in November continued slightly. Reduced to 396 yuan / ton.

Some industry sources stated that the prosperity of the cement industry will continue to linger at low levels and continue until next spring. From December to next February, due to the impact of climate and Spring Festival factors, construction of downstream projects will gradually slow down or be in a state of seasonal stagnation, and demand will be weaker than other quarters. Although there were some "directional" loose signals on the monetary and fiscal levels in November, it still takes time to reach the entity level. It is therefore expected that the substantial improvement in downstream demand will still require policy clarity.