Demand drives cement, sand and gravel prices back up! Sand and gravel industry to good development

Recently, with the domestic economic recovery and the construction of major projects, demand-driven prices have rebounded, and the prices of basic building materials such as cement, sand and concrete have risen sharply. As far as Guangdong is concerned, since February, cement has continuously increased by 80 yuan/ton, sand and gravel has increased by 25 yuan/ton, and many concrete companies have also notified to increase concrete prices by 50 yuan/square.

The real estate market released positive signals, March peak season more than 60 city cement prices

On March 15, Fu Linghui, spokesman for the National Bureau of Statistics, said that this year, under the influence of a series of policies, with the economic warming, there have been some positive changes in the real estate market, mainly reflected in the obvious narrowing of the decline in market sales.

From January to February, real estate sales fell 3.6 per cent, a sharp narrowing of the decline over the whole of last year. Sales, down 0.1 percent, also narrowed significantly. At the same time, real estate enterprises in place funds, start investment is also improving.

Investment in real estate development fell 5.7 per cent in January-February, compared with a 10 per cent decline for the whole of last year. From these circumstances, there have been some positive changes. In general, the current real estate market is still in the adjustment stage. In the later stage, with the gradual improvement of the overall economy and the improvement of market expectations, the real estate market is expected to gradually stabilize.

Tianfeng Securities believes that after 22 years of more-than-expected decline in cement production, the current cement enterprises may have more adequate preparation measures to cope with the decline in demand (reflected in the increase in the number of off-peak shutdown days set by most provinces in early 2023 compared with 2022). If the demand side can stabilize, industry profits are still expected to pick up in 2023. Through the review, the cement index and cement price trends are highly correlated, and if prices continue to rise in the March peak season, it may still catalyze valuation repair.

Putian Gangxing Industrial Co., Ltd. and Anhui Wuhu Conch Cement Co., Ltd. jointly issued a message saying that according to recent market changes, starting from 0:00 on March 8, 2023, the company's supply of bagged and bulk cement will be increased from the original price. 30 yuan/ton. According to statistics, Conch Cement in Jiangsu, Zhejiang, Anhui, Hunan, Fujian, Jiangxi, Guangdong, Guangxi, Shaanxi, Yunnan, Sichuan and other regions have issued notices to increase cement prices.

The layout along the "the belt and road initiative" route accelerates the expansion of aggregate business.

Recent demand for construction in the Middle East has been strong, and new infrastructure has accelerated to sea. The resumption of diplomatic relations between Saudi Arabia and Iran in March 2023 is expected to bring new opportunities for "Belt and Road Initiative" cooperation in the Middle East. A number of cement companies layout of cement production capacity in the Middle East, is expected to continue to benefit from the construction needs of the Middle East.

Huaxin (Hong Kong) Holdings Limited, a wholly-owned subsidiary of Huaxin Cement, intends to acquire a 59.58 per cent stake in Oman cement manufacturer at a transaction price of about US $0.1931 billion, announcing the cement business to enter the Middle East market. Conch Cement's production capacity in countries along the "the belt and road initiative" will be further released.

Aggregate business into the second growth curve. Haitong Securities pointed out that the capital expenditure of listed cement companies has increased in recent years, and the increase in capital expenditure on intangible assets is significantly higher than that of fixed assets. As an aggregate business with a market size of more than trillion yuan, its development is expected to build the second growth curve of cement enterprises.

At the enterprise level, both in terms of the increase in mine reserves in recent years and in terms of the proportion of construction in progress/fixed assets, Huaxin Cement and Shangfeng Cement are at the industry level. Haitong Securities expects Huaxin Cement and Shangfeng Cement to be stronger than the industry in terms of revenue growth in the aggregate business and the overall growth of the company.

Article from: sand aggregate network

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