Cement prices last week were relatively stable last week, the national average cement price 381.58 yuan / ton, the chain fell slightly 0.04%, basically the same as the previous week. Among them, the high mark rose 0.17% and the low mark dropped 0.28%.
In terms of sub-regions, East China continues to rise, and the overall average price in the southwest of China fell by 4.29 yuan/ton. Last week, cement prices rose in Shanghai, and high-grade cement rose 30 yuan/ton to reach 430 yuan/ton. The price increase in Shanghai is mainly affected by the price increases in the surrounding areas such as Jiangsu, Zhejiang, and Shandong. At present, the price performance in the surrounding areas is relatively stable. We expect that prices in subsequent Shanghai and the entire East China region will not fluctuate so much and will be mainly stable.
The overall average price of the southwest region fell by 2 yuan/ton. The decline was mainly concentrated in Guiyang, where the low-grade mark fell by RMB 30/t and the high-grade mark dropped by RMB 10/t. The reason for the decline was still due to the fact that after the previous restriction of power was eased, the supply of clinker kilns and the production of new capacity led to oversupply. We believe that this situation will continue in the short term.
In Other regions, the clinker prices in Guangxi and Guangdong continue to fall, and the price of cement in the follow-up may decline.
Last week, the national cement-coal price spread increased slightly to track the cement-coal price spread (taking into account three months of coal inventory). The national price spread last week increased by about RMB 0.5/t. Among them, the area in East China increased by 4 yuan/ton; in North China, it increased by 0.1 yuan/ton; in the southwest, it decreased by 2 yuan/ton; in the northwest, it decreased by about 1 yuan/ton. Last week, the regional cement-coal price spreads were northeast, northwest, central, north, east, southwest and south China in descending order.
Cement blocks outperformed the CSI 300 last week
In terms of market performance, the cement sector rose by 11.54% last week, outperforming the CSI 300 Index by 3.52%. Cement manufacturing industry PE (TTM, overall method) is 11.63 times, and PB (integral method) is 2.97 times. We believe that there are three main reasons for the better performance of the cement sector last week. The first is the improvement of real estate expectations, followed by the third quarter report, and the valuation of cement blocks.
Cement demand is expected to improve, and cement prices in Shandong and Henan, where the “week's increase†rating was maintained in the previous week, remained stable last week. However, the market’s response was normal. We can continue to pay attention to whether the market can fully accept price increases. At present, the autumn is almost over, and projects such as real estate and engineering projects that were suspended in the early stage have gradually resumed their work and have driven the demand for cement. Last week at the joint meeting of the 23rd session of the 11th National Standing Committee of the Communist Party of China, the Minister of the Ministry of Housing and Urban Development mentioned that after the unified information system is integrated into a platform, it will no longer have to adopt such an administratively intensive method. We think this means that the current purchase restriction policy will probably not continue to expand. Real estate is expected to be improved, and the current situation of declining real estate investment may have improved, and the demand for cement will probably be positive. We maintain our "overweight" rating for the industry.
In terms of sub-regions, East China continues to rise, and the overall average price in the southwest of China fell by 4.29 yuan/ton. Last week, cement prices rose in Shanghai, and high-grade cement rose 30 yuan/ton to reach 430 yuan/ton. The price increase in Shanghai is mainly affected by the price increases in the surrounding areas such as Jiangsu, Zhejiang, and Shandong. At present, the price performance in the surrounding areas is relatively stable. We expect that prices in subsequent Shanghai and the entire East China region will not fluctuate so much and will be mainly stable.
The overall average price of the southwest region fell by 2 yuan/ton. The decline was mainly concentrated in Guiyang, where the low-grade mark fell by RMB 30/t and the high-grade mark dropped by RMB 10/t. The reason for the decline was still due to the fact that after the previous restriction of power was eased, the supply of clinker kilns and the production of new capacity led to oversupply. We believe that this situation will continue in the short term.
In Other regions, the clinker prices in Guangxi and Guangdong continue to fall, and the price of cement in the follow-up may decline.
Last week, the national cement-coal price spread increased slightly to track the cement-coal price spread (taking into account three months of coal inventory). The national price spread last week increased by about RMB 0.5/t. Among them, the area in East China increased by 4 yuan/ton; in North China, it increased by 0.1 yuan/ton; in the southwest, it decreased by 2 yuan/ton; in the northwest, it decreased by about 1 yuan/ton. Last week, the regional cement-coal price spreads were northeast, northwest, central, north, east, southwest and south China in descending order.
Cement blocks outperformed the CSI 300 last week
In terms of market performance, the cement sector rose by 11.54% last week, outperforming the CSI 300 Index by 3.52%. Cement manufacturing industry PE (TTM, overall method) is 11.63 times, and PB (integral method) is 2.97 times. We believe that there are three main reasons for the better performance of the cement sector last week. The first is the improvement of real estate expectations, followed by the third quarter report, and the valuation of cement blocks.
Cement demand is expected to improve, and cement prices in Shandong and Henan, where the “week's increase†rating was maintained in the previous week, remained stable last week. However, the market’s response was normal. We can continue to pay attention to whether the market can fully accept price increases. At present, the autumn is almost over, and projects such as real estate and engineering projects that were suspended in the early stage have gradually resumed their work and have driven the demand for cement. Last week at the joint meeting of the 23rd session of the 11th National Standing Committee of the Communist Party of China, the Minister of the Ministry of Housing and Urban Development mentioned that after the unified information system is integrated into a platform, it will no longer have to adopt such an administratively intensive method. We think this means that the current purchase restriction policy will probably not continue to expand. Real estate is expected to be improved, and the current situation of declining real estate investment may have improved, and the demand for cement will probably be positive. We maintain our "overweight" rating for the industry.
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