Chinese cement prices recover as work restarts

Cement prices in China have shown signs of recovery as works in the country resume, according to Xinhua-run Shanghai Securities News. Cement producers in the northwest announced a price increase of their cement products by CNY20-64/t (US$2.82-9.03/t). In the eastern province of Zheijiang some cement products are also had prices increased by CNY10/t.

In addition, there have been reports of various parts of the cement industry supply chain gradually recovering. As of March 20, the operating rate of 274 cement clinker production lines across the country was 71.9 per cent. At the downstream, as of March 16, the actual resumption rate of construction projects was about 74.5 per cent, according to a survey conducted by 100njz.com, an information provider in the construction industry. "The resumption rate in our group has reached 96.6 percent," said a staff member of Anhui Conch Group, one of China's largest building material producers.

Cement prices in China continued to rise since the fourth quarter of last year, which is usually the peak season for cement demand. However, after the Spring Festival holiday from 24 January 24 to 2 February, affected by the COVID-19 outbreak, the suspension in construction projects weighed on the demand, leading to the decline in cement prices.

Prices of bagged ordinary Portland cement (PO 42.5) and bulk ordinary Portland cement (PO 42.5) were CNY502.90/t and CNY443.40/t, respectively in mid-March, down 4.5 and 6.8 per cent compared to those in the mid-January, according to China’s National Bureau of Statistics (NBS).

"As the epidemic prevention and control continues to improve, traffic is gradually recovering and population flows are accelerating. Cement demand in east China is expected to return to normal level by the end of March and early April," said Hou Linlin, a cement analyst with local commodity provider, SCI99.com.