Clinker depreciates or opens cement price cuts

Our data shows that the price of clinker along the Yangtze River in the Yangtze River Delta region was lowered by 20-30 yuan/ton last week. The reason for the downward adjustment was that some companies wanted to empty their inventory before the Spring Festival. The lowest ex-factory price of clinker in Anhui Province along the Yangtze River may have been 300 yuan/ton.

The current wide spread of clinker and cement will not affect cement prices in the short term, but it will encourage small- and medium-sized independent grinding stations to lower cement prices for the first time, which will in turn affect the prices of large enterprises.

According to our statistics, the 12,000T/D clinker line for Wuhu and Tongling Conch fired in December 2011, the 4500T/D clinker line for Baohuashan, Ganzhou, Jiangxi, and the Xuzhou Zhonglian 10,000t line to be ignited (as originally planned for the end of December) may be It was officially put into production in the first quarter of this year, and given that the downward trend in demand in the first quarter of 2012 is still difficult to reverse, companies are expected to maintain prices (even upwards) through active shutdowns or become more difficult. Therefore, we believe that, although the cement market prices generally experienced seasonal declines before and after the Spring Festival in previous years, downward pressure in the first quarter of this year may be particularly prominent.

Judging from the market performance, the cement prices in Jiujiang, Jiangxi Province, have shown signs of loosening. According to relevant personnel, the overall price will be reduced by RMB 10-15/ton during the New Year period this year. The market price in Nanchang can remain stable until the Spring Festival.