Changjiang securities: current point how to see cement?
2021 simple replay?Weak demand, tight supply, wide price shock 1, weak demand.In 2021, China’s cement output will reach 2.36 billion tons, down 1.2%, slightly negative on the low base of 2020.The monthly growth rate turned negative from May, and the demand dropped by more than 10% from September to December for four consecutive months.2, tight supply.The double control production limit from the end of August has a great impact on the industry. In some regions (Guangxi, Yunnan and Jiangsu), the output from September to October decreased by about 20%~30% year-on-year.Other regions such as central China, north also have different degrees of double control production.Meanwhile, weak demand starts from Q2 and basically runs through the whole year.And the tight supply reflected in September, more impact from September to October, the price from a small drop (off-season drop more than in previous years) to a big jump more than expected (Q4 far record high) wide shock interpretation.Change in supply and demand at the current point?Demand repair and supply correction 1. Demand repairInvestment side data is relatively weak, economic pressure in 21Q4 fully released.Whether it is the economic Work Conference at the end of 2021 or the government Work Report in 2022, we can see the beginning of policy easing, which can be seen in the issuance of special bonds and the quota approved in advance. At the same time, the credit policy is likely to be relatively relaxed in 22, giving the acceleration of key government-led projects with strong financial support.Moreover, the real estate side ushered in the policy marginal improvement within the framework, even though the short-term front-end data is still looking for the bottom, we judge that the industry’s most pessimistic demand expectations have passed, demand recovery as expected.From the micro point of view, as of 20220311, the cement shipment rate of China and East China reached 57% and 72%, respectively up by 2 and 10 PCT year-on-year.However, in terms of the lunar calendar, the year-on-year figure is still slightly lower, 13 PCT lower in China and 6 PCT lower in East China.From the point of view of the sequential improvement slope, the improvement of national shipments in the past two weeks is particularly obvious, reflecting the accelerated recovery of terminal demand.2. Supply correction.21Q3 since the price surged the main support factor is supply constraints and cost boost, with the opening of administrative control, 21Q4 at the end of cement prices and coal prices ushered in a rational return and reset, policy correction timely and bold.3, the price rises now, the profit foundation is stable.After the holiday, the price of clinker in East China has increased for 4 rounds in total, with a range of nearly 100 YUAN/ton. At present, the price of clinker and cement in East China are 482 yuan/ton and 531 yuan/ton respectively, 86 and 63 yuan/ton higher than that of last year.At the same time, the national coal price is 269 yuan/ton higher than the same period last year, so it is estimated that the gross profit of cement enterprises is 37 yuan/ton higher than the same period last year (not considering the time delay of raw material consumption).Market interpretation in 2022?1. Narrow range fluctuation of supply and demand.On the one hand, it is a trend for the dual carbon and dual control to switch from mobile warfare to protracted warfare, so the supply of administrative constraints throughout the year can still be expected, but it will be more balanced throughout the year.At the same time, the probability of capacity replacement is cut from off-sheet replacement to in-sheet replacement, and the impact of new increase can be almost ignored (in fact, the net increase in 2021 is very little, the new ignition cement clinker capacity is 35.74 million tons, and the net new capacity is 6.9 million tons after excluding the replacement closure of 28.84 million tons). The industry inventory logic is already very tight.2, the pattern is solidified.With the increase of sea freight, the imported clinker decreases, and the trans-regional impact on east China decreases with the improvement of the pattern of northeast and southwest China. The pattern is expected to be solidified, and the annual price stability can be expected.Focus on cement plate, Huaxin conch new Tianshan China building materials.3. Price rebalancing.We believe that as long as the demand does not decline significantly (we judge that the probability of 2022H1 is small negative and the demand of 2022H2 is expected to turn positive), the earnings of leading enterprises can still maintain the high state of nearly 3 years.On the price side, we think the 2022 peak may be difficult to match 21Q4, but the full-year price hub/mean is still expected to be higher year-on-year than in 21.1. Demand recovery is not as strong as expected;2. Supply restrictions will be significantly relaxed.Disclaimer: The content of the article is for reference only, does not constitute investment advice * Risk tip: the stock market has a risk, the market should be cautious