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Current position: Home > Company News > Cement price increase prompts “conspiracy” in the concrete industry to avoid “overpressure”

From: Linyi Xingang Concrete Co., Ltd.Date of release: 2018-3-31
Core tip: Cement price increases prompt concrete industry to "make changes" and avoid "overstress"
According to the Shanghai Securities News, rising cement prices have brought a lot of pressure on the downstream concrete industry, and have also brought about "move change" motivation. Guizhou, Wuhan and other concrete companies recently told the Shanghai Securities News that under the active coordination of the government, the heavy pressure on the early-stage concrete companies has eased.
What's even more gratifying is that at present, both the government department and the concrete enterprises are actively preparing flexible adjustment plans that are more adaptable to the market, so as to avoid the "overstress" of the concrete industry in the market fluctuations.
National cement prices have "raised", making downstream concrete companies "unable". In the middle of last month, concrete associations in Wuhan, Guizhou and other places issued a statement on soaring cement prices, urging relevant departments to intervene and intervene. With the active coordination of local government departments, the pressure of rising cement prices on early-stage concrete companies has eased.
More than half a month ago, staggering peak production and temporary suspension of production due to extremely low inventory stimulated the continuous rise in cement prices, and concrete companies were unable to conduct downward pressure on prices from downstream construction parties. In desperation, concrete companies in Guizhou, Wuhan and other places have appealed to the association for government intervention.
"Relevant departments have adjusted the reference price of the concrete market, and the price of cement has not risen. At present, the concrete enterprises in our region are producing normally at a margin," said Yang Lili, secretary general of the Wuhan Concrete Association.
According to reports, the concrete market reference price in the engineering cost of Wuhan before was 397 yuan / ton. In the middle and late December of last year, relevant departments raised prices two times in succession, and currently the price of concrete has been raised to 440 yuan / ton.
"With the active work of the Provincial Development and Reform Commission and other departments, the problems in Guiyang, Guizhou, China have been basically solved." Said Ni Wenyong, president of the Guizhou Provincial Building Materials Federation and the Provincial Concrete Association.
It is understood that after the reporter's previous report, the Guizhou Provincial Development and Reform Commission and other relevant departments quickly organized and coordinated, and held a "Cement Industry Antitrust Reminder and Warning Session". Southwest Cement, Conch Cement, Red Lion Cement, and TCC Cement, etc. And representatives of the Concrete Association were all present to discuss ways to solve the problem.
Ni Wenyong told reporters that under pressure, the concrete industry is also “making a change”, and the Guizhou Concrete Association is actively working with relevant government departments to prepare more flexible adjustment plans that are more adaptable to the market. He also said that in the future, the association will strengthen communication and reporting with the provincial development and reform commission and other competent departments, and create a fair and transparent market competition environment for the cement and concrete industries.
According to reports, concrete companies are in the plywood of the two strong industries of cement and construction parties, and the inability to transmit the price increases of upstream cement companies to downstream construction parties is one of the reasons why concrete companies are in trouble. The "market reference price" given by the relevant departments is regarded as an important reference price for the bidders of the construction party, which makes it impossible for the concrete enterprises to raise prices, which is another reason for the concrete enterprises' difficulties.
Relevant government departments have noticed this problem and are planning to make more flexible adjustments to the "market reference price".
On the other hand, concrete companies themselves are also "mending change." After the storm, both the Wuhan and Guizhou concrete enterprise associations are thinking about industrial integration plans in order to improve the market voice to deal with market fluctuations.
In addition, cement companies are also learning from it. Kong Xiangzhong, executive vice chairman of the China Cement Association, previously stated that cement companies need to establish a good communication mechanism with downstream users, and even form the necessary equity relationship to help the downstream to pass on additional costs.
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