Zhongjin: Weak demand for cement and other building materials continues in the off-season, focusing on opportunities to optimize the industry structure.

Zhongjin released a research report stating that in August 2025, the national cement shipment rate was an average of 45.2%, compared to 48.8% in the same period last year. The monthly cement production in August decreased by 6.2% year-on-year to 148 million tons, indicating continued weak demand for cement in the off-season. In terms of glass, as of September 2025, the daily melting volume of float glass was 159,000 tons/day, which was basically the same as the end of last year, and there has not been a large-scale industry shutdown. The oversupply has led to manufacturers maintaining a relatively high inventory level of 55 million boxes, and social inventory is also showing a trend of accumulation. In addition, in August, the supply and demand for steel were weak, with crude steel production at 773.7 million tons, a 0.7% decrease year-on-year, and domestic apparent consumption of crude steel at 683.9 million tons, down 0.8% year-on-year. Zhongjin's main points are as follows: Cement: Demand is under pressure, optimistic about marginal improvement in industry structure in the peak season Continued demand decline in August: In August 2025, the national cement shipment rate was an average of 45.2%, compared to 48.8% in the same period last year. The monthly cement production in August decreased by 6.2% year-on-year to 148 million tons, indicating continued weak demand for cement in the off-season. Price relatively weak: As of September 12, the average price of cement in July-September 2025 was 338 yuan/ton (376 yuan/ton in the third quarter of 2024). However, it has been observed that current cement prices have rebounded slightly from the low point in August, with the national average cement price in September at 338 yuan/ton, up 2 yuan/ton from the previous month, and an estimated gross profit per ton for cement enterprises in September was 58 yuan/ton, up 3 yuan/ton from the previous month. Optimistic about marginal improvement in industry demand and price recovery after price increases are implemented. Anhui Conch Cement (00914), Gansu Shangfeng Cement (000672.SZ), CR BLDG MAT TEC (01313) are recommended. Glass: Demand side continues to be under pressure, industry profitability at a low point waiting for large-scale shutdown From January to August 2025, the completed area of houses decreased by 17% year-on-year to 277 million square meters, due to the continuous decline in real estate affecting glass demand. On the supply side, as of September 2025, the daily melting volume of float glass was 159,000 tons/day, which was basically the same as the end of last year, and there has been no large-scale industry shutdown yet. The oversupply has led to manufacturers maintaining a relatively high inventory level of 55 million boxes, and social inventory is also showing a trend of accumulation. Spontaneous industry shutdown or capacity adjustment is still the main focus, and it is recommended to pay attention to the industry improvement driven by supply contraction and pressure on glass company profitability. Recommended stocks include XINYI GLASS (00868) and Zhuzhou Kibing Group (601636.SH). Steel: Weak supply and demand in the off-season, waiting for production cuts to take effect In August, steel supply and demand were weak, with crude steel production at 773.7 million tons, a 0.7% decrease year-on-year, and domestic apparent consumption of crude steel at 683.9 million tons, down 0.8% year-on-year. Looking ahead, production control is expected to be further strengthened in the fourth quarter of the year, improving industry supply and demand, and the profitability cycle is expected to continue to recover. The rally against "internal consumption" continues to play out, focusing on two main themes: 1) In a long-term perspective, the core assets of the industry are currently undervalued by the market as they are at historically low levels. With the bottoming out of the profit cycle, a valuation recovery is expected, with a focus on Hunan Valin Steel (000932.SZ); 2) In the short term, production control during the year and the marginal impact of capacity clearing on rebar enterprises are greater, so it is advisable to focus on steel companies with high efficiency and a high proportion of rebar production. Risk Factors Continuous downward demand risks, risks of rising raw materials costs.