China update: cement, coal and the economy

Cement

According to local press, the price of cement decreased by 1.1% m/m in April to 350 Yuan/t. Data from Morgan Stanley suggests that cement production grew by 6% y/y in March compared to 11% in January – February 2014. The country’s cement industry is said to be facing a weaker property market and poor weather conditions, however, infrastructure activity is reportedly continuing to boost demand in the south of China.

Coal

Coal production fell by 1% to 878 million t in 1Q14. Sales volumes also declined, dropping by 1.4% to 844 million t. The sector saw revenue and gross profit contract by 8.3% y/y and 41.2% y/y, respectively, in the first three months of this year. In April 2014, production levels were down by 1.31% y/y and sales of coal fell by 1.29% y/y. The China coal price index, released by China’s coal association, reveals a 17.3% m/m decline in April.

The falling figures have been attributed to a slowdown in economic growth, as well as the country’s efforts to reduce emissions and reliance on traditional fuels.

Economy

China’s economy grew by 7.4% y/y in the first three months of 2014 according to official figures. This represents a slowdown when considered next to full-year 2013’s 7.7% growth. In April, the consumer price index increased by 1.8% y/y. This compares to a rise of 2.4% in March 2014 and is the lowest rise in 18 months. Meanwhile the producer price index contracted by 2% y/y in April.

Edited from various sources by Louise Fordham

Read the article online at: https://www.worldcement.com/asia-pacific-rim/12052014/cement_prices_declined_in_china_in_april_2014_174/