Cement prices continue to decline as local cement demand enters the off-season. Last week, the national average cement price fell 0.55% month-on-month, and fell for the fifth consecutive week. The country's mill utilization rate declined, and cement inventory continued to rise. According to the analysis, from the current situation, profitability of the industry is still in a downtrend channel. If the leading companies do not take measures, the price decline will be difficult to change. With the continuous deepening of urbanization, the market may improve in the second quarter of next year.

Prices in East China continue to decline. According to digital cement network monitoring, prices fell last week in Zhejiang, Fujian, and Hubei. Prices in different regions fell by RMB 10-30/ton; Zhejiang, Jiangsu, and Jiangxi fell in clinker prices. And Guangdong.

Cement prices in eastern China continued to fall last week. Among them, the transaction price of the cement market in Hangzhou, Zhejiang, dropped by RMB 10-15/ton. Although the major leading companies’ external quotations are stable, they have been downgraded privately. Digital cement network analysis believes that the main reasons for price cuts are as follows: First, the end of the year is approaching, and the momentum of the company's impulse is greater; second, all production lines in the previous period are all resumed production, supply is increased, and inventory is high; third, there is a certain downward adjustment in the relative high prices. Judging from the recent market conditions, if the leading companies do not take measures, the follow-up prices will continue to drop slightly.

In the second quarter, turning into the trend of cement prices next year, the agency believes that in the first quarter, the price of cement in East China may still continue to fall. On a nationwide basis, the second quarter will see a turnaround, and cement companies' profits will also pick up.

Guosen Securities believes that, in terms of East China, under the influence of local cement companies' production cut-off plans, it is expected that the drop in cement prices in the first quarter of next year will be relatively limited. China Merchants Securities Co., Ltd. [10.00 0.50% share bar research report] believes that the characteristics of the off-season appear, and the expected correction rate is RMB 30/t. On the demand side, infrastructure and real estate will continue to pick up.

Shenyin Wanguo believes that cement prices will slowly decline and profitability will be in a downtrend. The overall industry profit will increase year-on-year next year, and the deepening of urbanization will bring more than expected benefits to the company. Shenyin Wanguo is optimistic about East China and believes that regional supply and demand improvement will be the best in East China in the next year. Guotai Junan also believes that the earnings of the cement industry next year will be better than this year, and it is expected that the earnings of some cement companies will start to increase positively in the second quarter of next year.

Urbanization has recently become the main reason for the rise of cement stocks. Last week, the National Development and Reform Commission re-emphasized urbanization. Zhang Ping, director of the National Development and Reform Commission, said on the 18th that urbanization requires scientific planning, summarizing the experiences of the pilot cities and towns in the country's development and reform, speeding up the reform of the system, and stepping up efforts to study and formulate policies and measures for the orderly advancement of citizenization of the agricultural transfer population.