Switch Between Low Season And Peak Season In Advance? East China Clinker Price Rises First, Cement Stock Rises 24% Monthly And Increases Integration Expectation

In the first ten days of March and the first ten days of August, these are the two low points of seasonal fluctuation of cement price in the past few years. In contrast, this year, affected by the epidemic situation and floods in the south, the price went even weaker and was still searching for the bottom until the end of July.

However, some positive signs have emerged. From July 23 to 24, major manufacturers in Zhengzhou, Anyang and other places in Henan province raised cement prices by 20 to 30 yuan per ton, according to China cement network.

The 21st century economic reporter learned that, in addition to Henan, the cement prices in Guizhou and Jilin have also increased, but the driving factors are slightly different. In contrast, the recent upward trend of clinker prices in the Yangtze River Delta region will directly promote the price increase of local cement enterprises, and under the effect of regional linkage along the Yangtze River, it is expected to further transmit to central China, Chongqing and other places.

"From the perspective of seasonal fluctuations, August is a node in the transition from the off-season to the peak season, and continues from September to November." Hou Zhuo Lin said in the next three months that cement prices have entered a low stage in the current market

Under the expectation of rising price, some cement stocks have changed. China building materials (3323. HK) hit a new high on August 3. Since this year, the stock market has reached a new high of 668.00, such as cement group.

Cement prices hit bottom

Although there are double effects of epidemic situation and flood in this year, the operation trend of cement price is similar to that of previous years, mainly falling in the first half of the year, and rebounding slightly in April and may. The cement market prices in North China and southwest China are lower than the same period last year.

In terms of enterprise operation, the revenue and profit scale of domestic cement industry declined by about 6% in the first half of the year.

After entering the second half of the year, the period from June to August still belongs to the traditional consumption off-season. In addition to the impact of Southern floods on terminal demand, the cement price further fell, and the fall rate was significantly higher than that in the same period of previous years.

Therefore, when the heavy rainfall factor gradually disappeared, the market price and shipment were rapidly improved.

"From July 31 to August 1, the price of clinker in the Yangtze River Delta will be increased by 20 yuan / ton to 340 yuan." Hou Linlin said that the rise of local clinker prices was related to the heavy rainfall weather in the early stage of Yangtze River Basin. In the heavy rainfall stage in the middle of July, transportation of some Wharfs in the basin was blocked, cement and clinker could not be transferred, and the corresponding production enterprises stopped kiln when their warehouses were full.

With the decrease of clinker output, its price will rebound.

Taking Zhejiang Province as an example, the supply of local clinker resources is tight recently. Among them, due to the abnormal delivery of some wharfs and the short-term blocking of downstream river channel after the resumption of traffic, to a certain extent, it also supported the clinker price.

With the increase of clinker price, some cement enterprises without corresponding production capacity will raise their own product prices in order to maintain their own profit level.

It should be pointed out that although the cement price increase in East China is a high probability event, the price increase at the enterprise level is not obvious.

Once the price rise in East China, it will bring some upward momentum to the upstream market such as central China and Chongqing along the Yangtze River.

"Although cement is a bulk commodity with obvious regional characteristics, the Yangtze River has developed water transportation, and regional prices have formed a linkage. For example, clinker from Chongqing can be transported down the river to the East China market." Hou Linlin said.

In her view, in the future, after the cement price in East China increases with clinker price, the cement in the two lakes region is also likely to follow the increase.

The adverse factor is that although the heavy rainfall weather in South China has been alleviated, the high temperature weather in August may still affect the construction of downstream construction sites, thus causing a drag on the terminal demand. Therefore, the current production enterprises for price adjustment slightly cautious, after all, is still in the transition stage to the peak consumption season.

However, under the double suppression of epidemic situation and flood, the low point of cement price in the year has been relatively determined. Before and after entering the peak consumption season in September, the domestic cement price must be increased, which is nothing more than a problem of more or less increase.

Assets integration of China building materials is expected to rise

However, under the background of industry income and profit decline, the business performance of enterprises is difficult to stand out.

As of August 3, Huaxin Cement (600801. SH), Jinyu group (601992. SH) and Jidong Cement (000401. SZ) with the largest scale all showed a certain decline. In contrast, northwest cement enterprises performed better, such as Ningxia building materials (600449. SH) profits in the first half of the year increased by 51% to 61%.

However, the secondary market has long predicted this, and the performance of the first half of the year has actually been reflected in the stock price. At the same time, driven by the expectation of the coming consumer season, plate rotation and valuation adjustment, the stock prices of cement enterprises have performed in the near future.

Among them, several stocks such as Conch Cement (600585. SH), Huaxin Cement, etc. not only fully recovered all the land lost in the market adjustment since mid July, but also set a new high in the year in recent two days.

In the whole July, Shenwan cement manufacturing plate also led the building materials plate with an increase of 23.97%, which was second only to the national defense and military industry industry, ranking the second among all Shenyi class industries.

In terms of individual stocks, some companies have also been recognized by funds, among which the most obvious performance is not the industry leader like conch cement, but some strong second-line enterprises.

For example, Huaxin Cement held 77.578 million shares on July 16, and increased to 108.498 million shares by August 1. During the same period, Jianfeng group's northbound capital holdings directly doubled, from 2.28 million shares to 5.62 million shares.

However, considering the significant changes in the composition of northward funds since the "630 market" and the obvious acceleration of trading capital trading frequency after entering the market, there are some limitations and lags in tracking the changes of the above funds.

In addition to the above-mentioned industry cycle fluctuations and other factors, some cement enterprises still have certain integration expectations.

On July 24, Tianshan shares (000877. SZ) announced that it planned to acquire the cement assets of the parent company, China building materials.

"It is estimated that if the final restructuring is successful, the clinker production capacity of the company will rise from the current 32.77 million tons to about 330 million tons, thus surpassing conch cement to become the largest cement enterprise in a shares and the second national cement enterprise in a shares." Huaxi Securities pointed out.

In addition, the restructuring is also seen as the beginning of asset integration in China's building materials, which also owns two listed companies, Ningxia building materials and Qilianshan (600720. SH).

From the stock price feedback of the secondary market, Ningxia building materials has achieved a 31.2% rise since July 16, leading all cement stocks.

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