Inventory of major events in the sand and gravel industry in 2022

As the saying goes, there are only three pandemics. At the end of 2022, the three-year new coronavirus epidemic prevention work officially ended, and the epidemic prevention policy of precise control made those who have been calling for the relaxation of control dumbfounded. Under the universal immunization, the market and economy are facing unprecedented challenges. The silence is not only in Shanghai, but also in most of China.

Alex Beecroft, the head of the Collins Dictionary, said that the word accurately describes the feeling of many Westerners in 2022, with Brexit, the war in Ukraine, bad weather and the pandemic all making people feel like they are in a long-term crisis. The annual keyword of "Oxford Dictionary" is literally translated as goblin mode, and many netizens also translate it as swing mode, or salted fish mode, and lying flat mode.

In 2022, in China, we will face an unprecedentedly complex environment, the world economic situation will be turbulent, global inflation will surge, the traditional real estate industry will be sluggish, the market demand will shrink, the supply side will be released in a centralized manner, and the internal and external troubles of the sand and gravel industry will intensify. Looking back on the past year, there are regrets, achievements, setbacks, and more motivation.

The reporter of the sand and gravel aggregate network took stock of the major events in the sand and gravel industry in 2022, and if there is any shortcoming, please correct it.

 

 

1. The macro situation is complex, the infrastructure/real estate market is sluggish, and the price of sand and gravel is generally declining.

As one of the traditional troikas that drive the economy, infrastructure has been pinned on high hopes in recent years. Since 2022, the impact of the pandemic has continued, the evolution of changes in a century has accelerated, and the outbreak of the Russia-Ukraine conflict, the Federal Reserve's unexpected interest rate hike and balance sheet maintenance have made the external environment for economic development more complex, severe and uncertain. Under the influence of multiple factors, China's economic development is facing the triple pressure of demand contraction, supply shock, and weakening expectations, and infrastructure construction is entrusted with important tasks.

Since the beginning of this year, although the National Development and Reform Commission has officially approved the Changsha-Zhuzhou-Zhuzhou-Tan metropolitan area, Xi'an metropolitan area, Chongqing metropolitan area, and Wuhan metropolitan area, and has successively issued the construction plan of the Beibu Gulf urban agglomeration, the Guanzhong Plain urban agglomeration, and the urban agglomeration in the middle reaches of the Yangtze River, in order to promote the development of related industries. However, the competition in the sand and gravel market is becoming more and more intense, affected by the epidemic and the limited increase in real estate demand, since the third quarter of last year, the phenomenon of "peak season is not prosperous", the sand and gravel market has plunged, fuel prices have risen sharply, high temperature power rationing, drought water level decline, normal epidemic prevention and control, etc., resulting in a sharp increase in sand and gravel production costs, and the inversion trend has been significantly intensified. Despite the push to accelerate infrastructure investment and create a physical workload, the market feedback has not been as expected. Industry insiders believe that the insufficient operating rate and shrinking demand are still the most critical reasons for the downturn in the sand and gravel market.

On December 14, 2022, the Central Committee of the Communist Party of China and the State Council issued the "Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035)", in order to avoid the economic structural risks caused by the excessive development of real estate infrastructure, the future will be turned to manufacturing, building materials and other pan-infrastructure investment, and finally improve the economic status quo of insufficient domestic demand and stabilize and rebound.

2. The concentration of the industry continues to increase, and the momentum of China Power Construction is like a bamboo, and the position of the first brother of sand and gravel is stable.

According to the statistics of the sand and gravel aggregate network data center, in the first half of 2022, the total production capacity of the top 20 enterprises in the country accounted for about 5% of the industry, and in the second half of the year, the top 20 enterprises represented by China Power Construction, China Building Materials, China Resources, Huaxin, and Conch will accelerate the acquisition of large-scale sand and gravel mining rights, and the industry concentration will be further improved.

In 2022, large central enterprises and state-owned enterprises will accelerate the layout of sand and gravel aggregates. In 2022 alone, PowerChina has obtained more than 10 large-scale sand and gravel mining rights.

At present, in addition to sea sand resources, PowerChina has obtained 18 green sand and gravel mining rights, with resource reserves of more than 8.6 billion tons and a designed annual production capacity of nearly 500 million tons of sand and gravel aggregates. In the five major plates of "Hydropower Sand City" of China Power Construction, the sand and gravel plate has risen to the third place, forming an all-round development pattern of "east, west, south, north and middle" of the green sand and gravel industry, and will gradually develop and expand the green sand and gravel production and marketing network in East China, North China, South China, Southwest China and other regions. The first brother of sand and gravel has a stable position.

3. Huaxin's 100-million-ton production line was officially put into operation, opening the prelude to the production of 10 million tons, and the supply side was released in a centralized manner.

On September 26, the high-profile Huaxin 100 million ton line, the world's largest sand and gravel production base, was officially put into operation, firing the starting gun for the release of 10 million tons of sand and gravel production capacity. According to incomplete statistics from the sand and gravel aggregate network, in the fourth quarter, at least 8 10-million-ton sand and gravel production lines held commissioning ceremonies, and the production capacity of the supply side was released in a centralized manner.

On October 21, Yuanjiang Jianguo Building Materials Technology Co., Ltd. with an annual output of 10 million tons of machine-made sand project was successfully put into operation; On November 8, the production line with an annual output of 13.9 million tons of Zhejiang Jintongshan Mine Comprehensive Utilization Project was officially put into operation; On November 25, Chongqing Wushan County Jiangyu Building Materials with an annual output of 15 million tons of high-quality sand and gravel aggregate line was officially put into operation; On December 7, the aggregate production line of China Building Materials Ruichang with an annual output of 30 million tons was officially put into operation; On December 21, Guangxi Hanrun New Material Technology Co., Ltd. (Nanning) held a commissioning ceremony for the aggregate project with an annual output of 10 million tons; On December 27, the annual output of 10 million tons of sand and gravel production line in Hongya County Green Building Materials Distribution Park was completed and put into operation; On December 28, the first phase of the Changlai Hushui Project of China Power Construction with an annual output of 20 million tons was officially put into operation; On December 30, China Resources Cement Wuxuan project with an annual output of 10 million tons of high-quality aggregates was completed and put into operation.

4. The launch of super-large and ultra-long-term mining rights has been accelerated, and the industry record has been continuously refreshed.

Since 2022, large-scale, super-large, and ultra-long-term sand and gravel mining rights have been continuously promoted in various places, and industry records have been continuously refreshed in terms of transfer period, transaction price, and resource reserves.

According to the statistics of the Sand and Gravel Aggregate Network Data Center, in 2022, more than 940 mining rights have been registered and publicized across the country. Shanxi Jinzhong has an annual output of 1 million tons of sand and gravel mine, and the transfer period is as high as 41 years. There are at least 38 mining rights over 30 years old, with a total annual production capacity of more than 220 million tons.

The top three in terms of total resource price are all located in Guangdong. The total price of granite and metamorphic sandstone ore resources for construction in Chongwangling Mining Area, Guiwei Town, Yunan County, Guangdong Province is the highest, with 7.85 billion yuan belonging to China Power Construction; The granite mine for facing in the Gulishan mining area of Fengkai County, Guangdong Province followed, with 6.82 billion yuan belonging to conch; The granite mine for construction in Guanyinshan Mining Area, Duyang Town, Yun'an District, Yunfu City, Guangdong Province, 6.1 billion belongs to China Power Construction.

There are four mining rights with resource reserves exceeding 1 billion tons, the largest single mine is the Yuanguang-Liangjia mining area in Yangxin County, Hubei Province (under special circumstances) on the Huaxin 100 million ton line, with resource reserves of more than 2.13 billion tons, the resource reserves of Chongwangling Mining Area in Guiwei Town, Yunan County, Guangdong Province won by PowerChina Corporation, over 1.44 billion tons, the resource reserves of Shiguchong Mining Area in Liuhe Town, Qichun County, Hubei Province, and the resource reserves of Liujiagou Basalt Mine in Ebian Yi Autonomous County, Sichuan Province of Leshan Guoxin Mining Co., Ltd. are nearly 1.06 billion tons.

The unit price of Zhengji Fushan basalt mine in Tianchang City, Anhui Province is the highest, equivalent to 50.65 yuan per ton, followed by the ordinary building stone mine of the site leveling and slope restoration project of No. 151 plot in Daixi Town, Wuxing District, Huzhou City, Zhejiang Province, with a cost of 50.54 yuan per ton.

5. Policy guidance documents have been continuously introduced, and the sand and gravel industry has become more and more standardized and its status has been improved.

As a mineral resource, the attitude of the government and the competent authorities plays a vital role in the development of the sand and gravel industry. In 2022, from the central to the local level, competent authorities at all levels continued to introduce various policies, including cracking down on illegal mining and illegal production and construction, production safety, compensation for ecological and environmental damage, criteria for determining potential dangers of major accidents, and air pollution control.

On November 10, 18 departments jointly issued a document to promote the improvement of building quality, and will improve product quality from the source of raw materials such as cement and concrete, so as to promote the quality of industrial products to steadily move towards the middle and high-end, the building quality and use function continue to improve, and high-quality sand and gravel are officially written into the central action plan.

In addition, 13 national ministries and commissions regulate illegal subcontracting of projects that win bids in project bidding; The Ministry of Water Resources has promoted the large-scale and unified mining of river sand and gravel, and piloted the electronic mining permit for river sand mining; The Supreme People's Court issued a document sentencing for the crime of stealing mining resources; The building materials industry promotes the implementation of carbon peaking and carbon neutrality; The Ministry of Finance, the Ministry of Housing and Urban-Rural Development, and the Ministry of Industry and Information Technology jointly promoted the implementation of government procurement policies to support green building materials and promote the improvement of building quality in 48 cities (municipal districts).

At present, 19 provinces in China have officially issued the "Mineral Resources Master Plan (2021-2025)", which clearly reduces the number of small mines, increases the proportion of large and medium-sized mines, promotes "net ore transfer" and accelerates the construction of green mines, etc., and the development of sand and gravel resources is more evidence-based.

6. The high-level changes of large building materials enterprises are frequent, and the planning of the sand and gravel sector is becoming clearer.

On December 31, 2021, China National Building Materials Group Co., Ltd. issued dozens of high-level appointment and dismissal notices within one day, which attracted great attention in the industry.

Since the beginning of this year, the external situation has become more and more complex, and many building materials companies have adjusted their organizational structure and aggregate layout at the same time, and have also transferred senior leaders. It is understood that China National Building Materials, China Resources, Huaxin, Conch, New Tianshan Cement, Shangfeng Cement, Jinyu Jidong, China Resources Cement, Fujian Cement and many other enterprises and other senior management have relevant personnel changes. On December 1, China National Building Materials Co., Ltd. issued an announcement that Wei Rushan served as president and Chang Zhangli stepped down. During December, nine subsidiaries of China State Construction, China Railway, China Railway Construction and China Energy Construction, the four major construction state-owned enterprises, made major changes to their leadership teams, and at least 18 positions were changed.

At the same time, the planning of large building materials enterprises for sand and gravel is becoming clearer and clearer.

At the beginning of November, Tianshan Co., Ltd. issued an announcement on internal business integration and structural adjustment, redividing the five cement sector companies of Zhonglian Cement, Southern Cement, Southwest Cement, Sinoma Cement and Xinjiang Tianshan into 14 regional management companies, and directly held by New Tianshan Cement and managed in a unified manner.

In mid-November, PowerChina invested 5 billion yuan to establish PowerChina East China Investment Co., Ltd., whose business scope includes mineral resources exploration, ecological restoration and ecological protection services for non-coal mine mineral resource mining, and research and development of new material technology. Some industry insiders pointed out that PowerChina's move is conducive to accelerating its sand and gravel aggregate business layout in East China.

7. Shanghai was silent, the markets in East China and the Yangtze River basin fell hard, and prices fell all the way.

The market in 2022 will be extremely difficult, and it will also cool down the originally popular building materials industry.

On March 28, Shanghai, China's largest city, pressed the pause button until June 1, when the lockdown was fully lifted, and Shanghai was silent for 75 days. The sudden silence has had an impact on the market economy and market confidence, which is beyond people's imagination.

According to the data of the Shanghai Sand and Gravel Association, the use of construction stone in Shanghai in the second quarter was 5.05 million tons, a year-on-year decrease of 65.97% compared with 14.84 million tons in the second quarter of 2021; Compared with 8.35 million tons in the first quarter of 2022, a decrease of 39.52%. In East China, where Shanghai is the target market, sand and gravel enterprises in the Yangtze River basin such as Zhoushan and the Yangtze River basin have been tortured, and behind the fall in volume and price, enterprises have withstood the test of severe winter. Even after the lockdown was lifted, the market driving force was not as expected, the traditional infrastructure peak period could not be opened for a long time, and natural factors such as high temperature and rainy season were mostly hindered, and it only slowly rebounded in the fourth quarter. However, compared with the same period last year, sand and gravel prices will still decline by 10-15% in 2022.

8. The construction of intelligent mines has been accelerated, and unmanned mining vehicles have begun to cover the whole mining area.

Intelligent mining has been a hot topic in the past two years, from the central to the local, science and technology empowerment has become an important support to solve the shortage of human resources in traditional industries such as mining, frequent safety problems, and improve production efficiency and management level. As a demonstration and pioneer site for the construction of the Two Mountains concept and green mines, Zhejiang has taken the lead in the construction of intelligent green mines.

In January 2022, Hangzhou Jiande Hailuodongshan Limestone Mine, Huzhou Xinkaiyuan Qingshan Stone Mine, and Zhejiang Jiaotou Dahuangshan Mine successfully passed the acceptance and became the first batch of intelligent green mines in Zhejiang Province. The pilot construction of the second batch of 15 intelligent green mines in Zhejiang is planned to be completed by the end of March next year.

In addition to the leadership of the competent department, the endogenous power of enterprises to build intelligent mines has been enhanced. The mining area of Tai Ni Jurong Plant took the lead in realizing the coverage of the whole mining area of unmanned pure electric mining vehicles, and built the first unmanned electric mining truck intelligent mine in the whole mining area of China's cement industry. By introducing driverless pure electric mining trucks to replace traditional fuel vehicles, and cooperating with the construction of photovoltaic and energy storage projects, we will promote the transformation and upgrading of enterprises to green and low-carbon.

On November 28, Guangdong Zhaoqing China Resources Cement Dapai Sand and Gravel Aggregate Mine held the handover ceremony of the first batch of construction machinery and equipment for unmanned transportation operation projects, marking the sand and gravel aggregate industry and even the world's largest number of mining trucks, the largest "unmanned driving + new energy" smart mine demonstration project officially entered the implementation stage.

9. The 2nd East China Sea Forum was successfully held, the sand and gravel big data map was officially launched, and the physical map of the Yangtze River Basin/Pearl River Basin was issued for the first time.

Information asymmetry is a common headache for colleagues in the sand and gravel industry. Especially with the transformation and upgrading of the sand and gravel industry, local governments continue to introduce new sand and gravel mining rights, and the needs of end users are constantly changing with the requirements of the times.

In September 2022, the 2nd East China Sea Forum, jointly sponsored by Sand and Gravel Aggregate Network, China Communications Construction and Zhejiang Mining Heavy Industry, was held in Tongxiang, Zhejiang, where upstream and downstream industry users gathered together for in-depth discussions and jointly promoted the sand and gravel and concrete industry to move towards high-quality development.

During the meeting, the sand and gravel aggregate network exclusively released the sand and gravel big data map (electronic map) [in November 2020, the sand and gravel aggregate network and XCMG excavator officially released the "distribution map of some large and medium-sized well-known sand and gravel production lines in China" (physical map)]. In order to meet the needs of industry colleagues to check the distribution of sand and gravel production lines online, and to have a more intuitive understanding of regional sand and gravel production capacity, the number of mines, product information and quantity, the sand and gravel aggregate network exclusively develops an aggregate information integration system, covering aggregate mines above one million tons in the industry, and is updated in real time.

The Yangtze River Basin and the Pan-Pearl River Basin are the areas of greatest concern. As an important transportation artery, there are many large-scale sand and gravel production lines in the two regions, the market demand is strong, and the sand and gravel circulation range is larger. In response to the needs of industry colleagues, combined with the current situation of some large and medium-sized sand and gravel enterprises and the production line information under construction (planned to be put into operation in 2022), in August 2022, the sand and gravel aggregate network drew a map of the production distribution of large and medium-sized sand and gravel aggregates in the Yangtze River basin and the Pan-Pearl River basin.

In 10 and 3 years, the epidemic control was officially relaxed, and at the end of the year, all employees were immunized, and the shutdown and production stopped to enter the "Spring Festival mode" in advance.

On November 11, the Comprehensive Group of the National Epidemic Joint Prevention and Control Mechanism officially issued the "Notice on Further Optimizing the Prevention and Control Measures of the New Coronary Pneumonia Epidemic and Doing a Scientific and Accurate Job in Prevention and Control", which has also been called the new 20 measures for epidemic prevention. On December 7, the "Notice on Further Optimizing and Implementing the Prevention and Control Measures for the Novel Coronavirus Pneumonia Epidemic" was issued, which optimized and adjusted the division of risk areas, nucleic acid testing, and isolation methods, which was known as the New Ten Measures for Epidemic Prevention. The domestic epidemic prevention work has been gradually liberalized in just two weeks, and the normal production of various industries has been fully restored, and the catering service industry has also been fully opened, and the national nucleic acid testing will no longer be conducted. On December 13, the big data itinerary card applet, which has been with us for more than 3 years, was announced to be offline, and the three-year epidemic prevention and control lockdown was fully opened across the country.

After three years of epidemic prevention, a large number of small and medium-sized enterprises are struggling, and problems such as layoffs, unemployment, and loan breakage have emerged one after another. The market is chilling and people are worried about the future. After the control was relaxed, the number of people who were unwell increased dramatically, and they were forced to stay at home, and even some enterprises were unwell and had a collective holiday. From the flow of vehicles, passengers and people in public places plummeted, many areas entered the "Spring Festival mode" ahead of schedule.

--- article transferred from: sand and gravel aggregate network