The cement industry will be off-season as scheduled

The first quarter is the traditional low season for the cement industry. On the one hand, the weather turned cold and winter construction conditions were poor. Especially, the northern ice and snow conditions were not suitable for civil engineering construction. On the other hand, the first quarter of the year included Spring Festival factors, and the return of peasant workers to their homes and holidays also led to a decline in construction days. The first quarter of this year will also be in the off-season as in previous years, and demand will begin to decline in the fourth quarter of 2011.

From a regional point of view, the cement market in the northern regions where winter is mostly ice and snow will be relatively lighter, and the warmer southern regions will be relatively better. In the spring of January of this year, from late January to early February, it will be the lightest time for cement demand. According to the normal law, March is the month of transition between the off season and the peak season. From April to June, the cement industry has entered the peak season. However, particularly cold regions like Xinjiang and Northeast China may not enter the peak season until May. Some southern regions will enter the peak season from late March to April.

In the off-season, the cement price will be the following behavior. In the northern region or the southern region, the cement price will show the same pattern as in previous years, and the peak season prices will drop in the off-season. Some parts of East China have been shut down from the middle or late January, and the estimated time is about 1 month. Cement prices should not change much beyond market expectations during this period. What really matters is the March-April period, when the off-season and peak seasons change, cement prices may change substantially. This time point is worth focusing on.

Looking to the future, the current policy began to show signs of slow relaxation. It is expected that the first quarter of this year will gradually form the bottom area of ​​demand, and the second half of the year will usher in an upward trend and space. It is expected that from May to June, the slowest growth rate of cement demand from September to October will be able to return to the rising channel. Before this, they are all in the downward growth channel. This is mainly due to the fact that the policy has relaxed from the beginning to the actual pulling of demand and depends on the intensity and frequency of policy relaxation. To sum up, demand and prices in the first half of 2012 will be under downward pressure, and we can see signs of upside in the second half of the year. Demand in the first quarter is particularly in the off-season. At the end of the first quarter and early in the second quarter, we will see substantial changes in prices.

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