January 3rd, 2025
CCM Market Insight (December, 2024)
Raw material supply:
Till end of December, ore mining for 2025 is still not opened up. It is said that the mining capacity for each mine has been approved, but the specific mining plan has not been announced yet.
It is expected to become easier to buy ore starting from January, more stable ore supply means finished product price will accordingly kept at a more stabilized status - no frequent and big increases.
But the implementation of the mining restriction policy has determined that ore has been programmed as a scarce resource, it's believed that product price will not return to the low level as before October, 2024.
Capacity replacement:
Govenment has clearly required all enterprises to gradually start the capacity replacement plan in the new year and requested complishment of replacement by the end of 2025.
Replacement requires 140,000 tons of old capacity to replace 100,000 tons of new capacity. Enterprises that cannot reach 100,000 tons of new capacity will have to stop production, or to work with other enterprises to reach a total capacity of min. 140,000 tons to continue producing.
In this case, the small enterprises (who itself doesn't have 140,000 tons to replace) that originally operated independently can no longer decide the selling price all by their own.
The price guideline needs to be jointly confirmed by all cooperative enterprises to ensure common interests, room for price negotiation is compressed again.
Meantime, enterprises are also required to built new kilns (specific kiln requirements to be notified), which is another huge input. This is another key factor for potential price increase.
Price trend:
Finished product price of CCM 85%/87%/90% is kept at similar price as Novemeber, but no decrease.
From current marketing information we believe it won't decrease in January, 2025, or can even lead to further increase based on the implementation of the capacity replacement policy.
