Recently, with the accelerated recovery of "old infrastructure construction" (traditional infrastructure construction), cement prices have risen in many parts of our country.

The reporter learned that the National Cement Price Index (CEMPI) rose from 135.95 on July 31 to 138.26 on August 19, an increase of about 1.7%. Among them, the Yangtze River Cement Price Index (YRCEMPI) rose by about 5.91%.

In this regard, Wang Qi, an analyst in the cement industry of Zhuo Chuang Information, told reporters that the general increase in cement prices across the country began at the end of July.

"Among them, East China first began to see price increases, and prices in Henan and other places rose earlier. This is due to the relatively large price decline in the previous period. Prices began to rise after manufacturers stopped kilns. According to the regular pattern of previous years,  the general price rebound at the point of mid-early August is a seasonal change." Wang Qi said.

According to Wang Qi, the demand for cement is mainly concentrated in traditional infrastructure construction and real estate. Since the beginning of this year, the demand of real estate has been relatively weak, while the growth in traditional infrastructure construction in the central and western regions has been more obvious. Excluding the impact of the epidemic in the first quarter, the overall demand for cement is relatively flat compared with last year. From May to July, the demand recovered quickly.

Regarding the future trend of cement prices, Wang Qi believes that the prices will show a gradual upward trend starting from August,  and the follow-up will depend on the impact of the resumption of production in autumn and winter. By the end of the third quarter and the fourth quarter, whether prices will rise depends on supply and demand. In terms of demand, demand will enter the peak season after the fall, and the temperature in the southern region will not be very low, and construction activities will be concentrated. On the supply side, the cement production industry enters the winter production period in mid-November each year. Cement companies suspend production intensively and there is a gap in supply and demand. This is one of the main reasons why cement prices hit a high point at the end of each year. However, for winter peak staggering, we are beginning to avoid one size fits all. The companies that have better control on energy saving and emission reduction can be exempt from peak staggering. It is still difficult to judge how much the policy trend will have on the supply side.

Benefiting from the rebound in cement demand and prices, the A-share cement sector (Dongcai industry classification) stocks have also been favored by many brokerage analysts.

Data from Oriental Wealth Choice Financial Terminal shows that as of August 20, 12 of the 17 stocks in the A-share cement sector have received a "buy" rating given by institutional investors. Among them, stocks with a “buy” rating by more than 10 institutions include Conch Cement (20), Jidong Cement (17), Huaxin Cement (13), Qilianshan (12), and Tower Group (12) ), Tianshan shares (11 ).

Yan Guang, an analyst at Pacific Securities, believes that from May to July this year, the monthly growth rate of infrastructure construction investment was 8.3%, 6.8%, and 7.9%, respectively. With the counter-cyclical adjustment of infrastructure construction, the cement demand in Beijing , Tianjin and Hebei regions which are mainly focused on key projects will grow steadily, the industry's future supply and demand pattern is expected to improve, and regional prosperity will rebound.

In an interview with reporters, Li Xiang, fund manager of Beijing Yunfeng Asset Management Co., Ltd., said that cement demand will continue to rise in the second half of the year, leading to a gradual increase in the industry's prosperity. It is expected that the market will continue until around the Spring Festival next year.

"I think that as the backlog of demand continues to be released in the future, investment opportunities in the A-share cement sector will also be concentrated in some leading companies." Li Xiang said.