Sichuan Cement Price Suffers Downturn


Data collected by the Sichuan Provincial Department of Commerce shows that local cement player have lowered cement prices on cement importation and new capacity releasing in May and June.

In the first half of June, the monitored average factory price is 389 yuan per ton, down 2.6% on a month-on-month basis. Meantime, the nationwide average cement price is 321 yuan per ton. In the second half of May, Sichuan cement price also went down by 2.03% on a month-on-month basis.

Thanks to the supply-demand gap (even before the Wenchuan quake), Sichuan cement player enjoyed high prices for a rather long time. Before the knock down starting from April, cement from Chongqing, Yunnan and Shaanxi could be profitable even after taking communication and other fees into consideration.

By the middle of May, new capacity put into production in Sichuan amounted to 34 mln tons. Adding existed 53 mln tons of Shaft kiln capacity, Sichuan has a total cement capacity of 87 mln tons at present. Cement supply is not so tight. Due to the impacts of global economic crisis and the completion of rural post-quake reconstruction, local demands for cement dropped.

Confronted with imported cement from Anhui Conch Group, Sichuan cement players like Yadong, Esheng and Lafarge, brought down prices to secure their markets.
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