February 28th, 2025
CCM Market Insight (February 2025)
Raw material supply:
Ore is still limited supplied, and it’s still difficult to find good grade of ore at proper price.
It takes a lot of efforts and need quite a interpersonal network to work it out, and still you may fail to get any ore, or only get to buy it at an increased price.
At this stage, we are still stocking the appropriate amount of ore in advance according to the order plans to ensure the basic production and supply.
Government inspection:
The government inspection team is expected to arrive in the Dashiqiao area in mid-to-late March, and the specific inspection time has not yet been determined.
During the inspection period, basically all factories shall stop calcinating. The semi-finished products that have been calcined may still be processed and milled into the required particle size by Raymond machine.
Only factories with substantial cash flow and large warehouses may have the ability to stock some semi-finished goods to keep supplying after production stops, but more are likely to just shut down.
Capacity replacement:
The government is still actively promoting the process of capacity replacement.
In mid-February, the government has publicized the details of the capacity replacement plan of the first 15 enterprises, including the new capacity, equipment/production specifications, quantity, the types of products that can be produced, and the starting and completion time of the replacement, etc. Then on February 24, the government announced the details of the second batch of 12 production capacity replacement enterprises.
This means that capacity replacement has become an inevitable trend, regardless of whether enterprises are willing to, they have to gradually carry out specific replacement actions in accordance with the policy.
Therefore, the increase in production costs and the suspension of supply caused by building new new production lines are also a certain.
On the other hand, many small enterprises who are not qualified for the capacity replacement due to too small scale, non-standard or other reasons, will have to stop running.
Price trend:
Finished product price of CCM 85%/87%/90% still remains the similar stable status as January till end of Feb, but we predict it will be increasing at latest from mid-March because of the government inspection team's visit.
