China’s cement market warms up

China’s cement market warms up
Published: 29 April 2008

China’s cement price in March went up 11.94 per cent year on year and 4.67 per cent month on month despite the first quarter being the traditional off season for cement consumption, causing industry observers to predict an early onset of the peak consumption season this year.

According to Digital Cement, 22 out of 30 Chinese cities and regions reported rise in cement price in March, while none reported price drop. Leading the price rises are Chongqing, Chengdu, Guangzhou, Xi’an and Changsha, with cement prices rising 51.85 per cent, 36.99 percent, 34.33 per cent, 24.07 per cent and 18.97 per cent respectively.

Meanwhile, Shanghai, a market known for its lower-than-average cement price, reported an 18.52 per cent YoY price hike in March.

Analysts believe that the current cement price hike has exceeded the usual range of seasonal fluctuation. Three factors are behind the strong cement price this year: first, the demand by increased infrastructure investment after the snow havoc in the stricken areas; second, the country’s agenda of building the ’new socialist countryside’ will strut up demand for cement in the long run; and third, China plans to phase out 80Mta of backward cement production capacity this year, which will help prices to remain strong.