November was a turning point in the demand for the construction industry from the peak season to the low season, but the cement, glass, and steel in building materials products went crazy, especially the increase in cement prices was not available. In the third-tier city where the editor is located, Zibo also has a shortage of cement. Due to the shortage of concrete, the construction site market is not full. According to a friend who is engaged in budget work in a state-owned construction enterprise, "the supply of concrete has been intermittent for one and a half months. Up. "
In fact, it is not only cement that is increasing, but the price of glass in non-metallic building materials has also risen for more than half a year, and the price of metal building materials has also caught up in November. The cement, glass, and building material price indexes monitored by Zhuochuang Information have the largest fluctuations in the past six months (June 1 to November 30) reaching 13%, 14.4%, and 11.31%, respectively.
From the point of view of the rise in prices, the direct reasons are nothing more than supply and demand issues. Is the supply- or demand-dominated factor influencing price fluctuations?
1. The supply of building materials cannot constitute the main reason for the price increase
Cement, glass, and steel
are all “polluting industries” in traditional cognition. These three types of companies have always been the top priority in previous environmental inspections. In the Beijing-Tianjin-Hebei Air Pollution Prevention Action Plan, these three types of enterprises have never been absent. Is the increase in the prices of cement, glass and steel caused by the shortage of supplies?
Let's take a look at steel. The supply of steel has always remained relatively high. Among the three products, the financial properties of steel are the strongest and are more likely to be affected by economic and expected factors. The production of steel has maintained a high level in the past year. It is highly likely that the crude steel output in 2019 will reach a historical record. The output of construction steel products monitored by Zhuochuang Information is always at a relatively high level. Obviously, the rise in construction steel prices is
not due to a shortage of supplies.
Looking at glass products again, the output of glass products is similar to that of construction steel, and output has been relatively high. According to data released by the National Bureau of Statistics, China ’s float glass production totaled 776.2 million load cases, an increase of 5.2% year-on-year. From the perspective of supply, the supply of glass products does not constitute an obvious support for prices.
As for cement, the production and supply of cement are also at a relatively high level. National Bureau of Statistics data show that from January to October 2019, the country's cumulative cement output was 1.91 billion tons, an increase of 5.8% year-on-year. From the perspective of production, according to the monitoring data of Zhuochuang Information, the operating rate of the cement mill at the end of November was 57.89%, and the same period in 2018 was 48.87%, which means that from the perspective of production, cement has been at a relatively high level. Market supply has not decreased, but has been increasing.
From the perspective of supply data, the output of building materials is relatively high, especially for cement. Its operating rate is significantly higher than in previous years, which means that from the perspective of supply, the market is not lacking. But why does the cement market reflect a serious shortage?
2.Inventory is at a low level
Among the data reflecting the supply indicators, inventory is also one of the important indicators. Inventory has both attributes of supply and demand. During the price increase process, due to the increase of speculative demand in the market, inventory will increase, from the mentality Speaking of "hoarding hoarding" has become the choice of many traders and even speculators.
The rebar social inventory change in 2019 is slightly different than in previous years. From the data of the past ten years, the rebar social inventory generally shows two peaks in a year, one in March and one in October. It is the demand of the two traditional consumer seasons, "Golden Three Silver Four" and "Golden Nine Silver Ten". Traders stock in advance to prepare for the peak season demand. In the second half of 2019, the social inventory of steel products first rose and then fell, and the peak level appeared in August. After entering October, the social inventory level did not increase but fell, and showed a difference from the previous year's rapid decline. At the end of November, the inventory level was close to 10 The lowest level since the beginning of the year.
The inventory change of glass is similar to that of steel. The inventory level fluctuates regularly due to changes in market demand during the year. The level of float glass inventory began to decline significantly in 17 years, and the inventory showed an upward trend from 17 to 19, but the total inventory was small. By the end of October, the inventory had dropped to 38.139 million weight cases, which was lower than the same period of 181.7976 million weight cases.
In terms of cement inventory, after 15 years, the inventory level of the cement industry also shows a downward trend. The inventory fluctuations are not regular. The cement inventory in 19 years was generally low. The total cement inventory at the end of November was about 61.01 million tons, which was 895 lower than the same period last year 10,000 tons.
From an inventory point of view, the inventory level of products from building materials is relatively low. Under the circumstances of changing demand, there has been a situation of oversupply. Starting in November, China began to implement heating season production limit operations, which is expected to affect the supply of cement and glass. Large, but because the current production profit is at a relatively high level, the production enterprises actively reduce the burden of kinetic energy is significantly insufficient, the rapid decline in inventory entry has further exacerbated the expectations of insufficient supply in the market.
3. The change in demand is the main reason for the price increase
In 2019, real estate changed from “land-driven” to “construction-driven”. At this stage, demand for glass increased, causing prices to rise sharply. In addition, since this year real estate investment has shown a certain "resilience". According to statistics from the National Bureau of Statistics, from January to October, the floor space of real estate development companies' construction area was 8,588.8 million square meters, an increase of 9.0% year-on-year, and the growth rate was 0.3 percentage points faster than that of January-September. The floor space of newly started housing was 1,858.34 million square meters, an increase of 10.0%, and the growth rate accelerated by 1.4 percentage points. In addition, the warm winter weather this year has promoted active construction of real estate and infrastructure, and the prosperity of the construction industry has remained high. In addition, near the end of the year, there is a phenomenon of rushing construction in various places, so the increase in demand has driven the prices of major building materials such as cement and rebar.
The super toughness of real estate performance is the main reason for the good performance of construction materials this winter. The acceleration of the growth of newly started construction area also represents the continued toughness of real estate demand. According to the real estate steel model established by Zhuochuang Information based on the newly started real estate area, real estate steel demand has risen again after July, and it will still be able to maintain a high level of growth in the next three months. The data in December is expected to exceed the peak of 2700 in April 10,000 tons level.
Reinforcing steel and cement are used in the real estate market. Therefore, it can be inferred from the demand for steel for real estate that cement demand also remains strong. The toughness of real estate demand is the main reason for the price performance of building materials products to exceed market expectations in the past six months. The demand for glass lags behind cement and steel for 10-24 months. It is mainly used in the construction and installation of real estate. The rise in real estate demand in 18 years formed a strong support for glass demand in 19 years.
Summary: Since the second half of 2019, the rise in glass, cement, and rebar has been brought by the toughness of demand for building materials represented by real estate, and the level of destocking has determined the phased supply and demand contradictions of the three products. On the whole, the price trend of glass represents the lagging demand caused by the increase in real estate investment in the past two years, the rise in the price of cement represents the short-term demand toughness, and the rise in the price of construction steel is a comprehensive reflection of demand toughness and poor macro expectations.
Inventory, when the price rises, will be converted into speculative demand, and when the price is falling, it will be converted into hidden supply, which will increase the price volatility. We call it the "X" factor that directly affects price fluctuations. The resilience of real estate demand is the main reason for the increasing importance of the current "X" factor. No matter how the real estate market lands in 2020, the "X" factor that affects the current building materials market will still exist.