Real estate and infrastructure investment remained hot in January and February, which may push up cement prices

China Logistics Information Center recently released the cement market analysis report for February 2017. The report pointed out that from January to February 2017, the national cement output fell by 0.4% year-on-year, and real estate investment and infrastructure investment, which are closely related to cement demand, showed a good growth momentum, and cement prices may rise slightly in the short term.

According to the report, from January to February 2017, the national cement output totaled 240.079 million tons, a year-on-year decrease of 0.4%, and the decline was 7.8 percentage points narrower than that of the same period last year. The cumulative output decreased by 1.33 million tons compared with the same period last year. From January to February 2017, the growth rate of national fixed asset investment rebounded slightly; The growth rate of investment in real estate development enterprises has rebounded significantly, the growth momentum of housing construction area and new construction area is good, the area of land purchase has also turned from year-on-year decline to growth, and the real estate market has obvious signs of recovery; Infrastructure investment grew at a high level.

According to the statistics of the National Bureau of Statistics, from January to February, the investment in fixed assets (excluding rural households) was 4,137.8 billion yuan, a year-on-year increase of 8.9 percent, and the growth rate was 0.8 percentage points higher than that of last year. The national real estate development investment was 985.4 billion yuan, a nominal increase of 8.9 percent year-on-year, and the growth rate was 2 percentage points higher than that of last year.

Infrastructure investment (excluding electricity, heat, gas and water production and supply) was 831.5 billion yuan, a year-on-year increase of 27.3 percent, and the growth rate was 9.9 percentage points higher than that of last year. Among them, the investment in water conservancy management increased by 19.1 percent, the growth rate fell by 1.3 percentage points, the investment in public facilities management increased by 35.8 percent, the growth rate increased by 12.9 percentage points, the investment in road transport increased by 21.6 percent, the growth rate increased by 6.5 percentage points, and the investment in railway transportation increased by 12.1 percent, down by 0.2 percent last year. From the perspective of construction and newly started projects, the total planned investment of construction projects is 587537 billion yuan, a year-on-year increase of 22%, and the growth rate is 12 percentage points higher than that of last year; The total planned investment of newly started projects was 2,013 billion yuan, a decrease of 8.3 percent, and an increase of 20.9 percent last year.

The housing construction area of real estate development enterprises was 6,229.5 million square meters, a year-on-year increase of 3.2%, and the growth rate was the same as that of last year; The area of new housing construction was 172.38 million square meters, an increase of 10.4%, and the growth rate increased by 2.3 percentage points. The land purchase area of real estate development enterprises was 23.74 million square meters, a year-on-year increase of 6.2%, and a decrease of 3.4% last year.

According to the report, overall, at the beginning of this year, real estate investment and infrastructure investment, which are closely related to cement demand, showed a good growth momentum, and the national cement output did not decline significantly in the off-season at the beginning of the year, and the cement market got off to a good start in 2017. It is expected that in a short period of time, domestic cement prices may show a slight upward trend, and the market is expected to recover early.