Flash | 25 Nov 2025 06:47:35 ET │ 8 pages China Materials What's New at 2025 China Materials Tour: Meeting with Digital Cement Expert CITI'S TAKE We hosted the 2025 China Materials Tour and met with Digital Cement on 19th Nov. Ms. WANG Xiaoliang, chief analyst at Digital Cement, attended the meeting. Mrs. Wang estimates cement demand to further decline by 6% YoY in FY26. Overproduction capacity swap progression is ahead of expectation, whilst the key is when capacity control will be strictly executed. She c ...

Summary of China Basic Materials Monitor (November 2025) Industry Overview - The report focuses on the **China Basic Materials** industry, highlighting signs of **weaker demand** across various sectors, including white goods, renewables, and construction, which are experiencing a sequential deterioration beyond seasonal factors [1][1][1]. - **Infrastructure** projects are at multi-year low start rates due to funding challenges from local governments [1][1][1]. - The **automotive sector** remains robust currently, but concerns are emerging for the first quarter of 2026 [1][1][1]. - **Energy Storage System (ESS) batteries** are seeing accelerated growth, with positive expectations for 2026 based on producer feedback [1][1][1]. Demand Trends - Current demand in China is reported to be **7-12% lower year-on-year** for cement and construction steel, and **5-10% lower** for flat steel, copper, and aluminum [1][1][1]. - Finished goods inventory has increased, primarily due to metal fabrications and selected appliances and machinery [1][1][1]. - The **forward orderbook trend** is mostly stable month-on-month, with **61%** of respondents indicating an increase in downstream sectors and **35%** in basic materials for November [2][2][2]. Supply Dynamics - On the supply side, there is excess production and safety inspections leading to a contraction in output in key coal-producing regions [1][1][1]. - Incremental changes in cement and steel production have been limited [1][1][1]. - Recent weeks have seen improvements in margins/pricing for coal, aluminum, copper, and lithium, while steel prices have softened and cement prices remain stable [1][1][1]. Key Statistics - The report indicates a **deceleration in demand** due to high commodity prices and the diminishing momentum from trade-in programs [1][1][1]. - The **current demand** metrics reflect a significant decline across various materials, indicating potential risks for investors in the basic materials sector [1][1][1]. Conclusion - The China Basic Materials industry is facing challenges with weaker demand across multiple sectors, particularly in construction and infrastructure, while some segments like automotive and ESS batteries show resilience. The supply side is also adjusting to these demand changes, with implications for pricing and production strategies moving forward.

Summary of Key Points from Conference Call Industry Overview Basic Materials - China - **Copper Prices**: LME copper rose 1.5% WoW to US$10,856/t, while the China price increased 1.3% WoW to RMB87,200/t [1][31] - **Aluminum Prices**: LME aluminum slipped 0.2% WoW to US$2,830/t, while the China aluminum price increased 1.7% WoW to RMB21,910/t. Domestic aluminum margins improved by RMB395/t WoW to RMB6,094/t due to lower power costs [1][31][52] - **Gold Prices**: COMEX gold climbed 2% WoW to US$4,084/oz [1][11] - **Lithium Prices**: Average price of domestic battery-grade lithium carbonate (99.5%) rose 5.9% WoW to RMB85.2k/t [1][55] - **Uranium Prices**: Uranium U₃O₈ spot prices settled at US$77.7/lb, down 2.7% WoW [1][57] - **Cobalt Prices**: China cobalt spot price edged up 1% WoW to RMB395,000/t [1][63] Steel Industry - **Finished Steel Prices**: Rebar prices edged up 0.2% WoW to RMB3,218/t, and HRC rose 0.2% WoW to RMB3,298/t [2][66] - **Inventory and Consumption**: Finished steel inventory fell 1.7% WoW to 14.8 million tons, while apparent consumption slipped 0.7% WoW to 8.6 million tons [2][66] - **Iron Ore Prices**: Iron ore prices declined 1% WoW to USD104/t [2][66] - **Profit Margins**: Higher coke costs pressured margins, with rebar narrowing by RMB28/t WoW to –RMB392/t and HRC contracting by RMB36/t to –RMB380/t [2][66][75] Cement Industry - **Cement Prices**: Average national cement price traded higher by 0.6% WoW to RMB345/t. Prices in various provinces showed mixed trends [3][88] - **Demand Recovery**: National cement demand slightly recovered amid favorable weather conditions, with producers planning to push prices higher by year-end [3][88] - **Shipment and Inventory Ratios**: Nationwide shipment ratio decreased by 0.3 percentage points WoW to 40.0%, while inventory ratio was at 69.4%, down 0.2 percentage points WoW [3][20] Paper and Glass Industries - **Paper Prices**: Paper price rose by 1.76% WoW to RMB3,669/t, supported by supply shrinkage and low inventory [3][99] - **Glass Prices**: National average float glass price settled lower by 0.16% WoW to RMB1,195/t amid lukewarm demand. Xinyi float glass GPM was down 0.5 percentage points to 10.8% [3][22][98] Solar Materials - **Polysilicon Prices**: N-type polysilicon and granular silicon prices remained stable at RMB53/kg and RMB51/kg, respectively [3][109] - **Solar Glass Capacity**: Solar glass daily capacity climbed 1.43% WoW to 88,590t/day, with inventory days expanding 6.5% WoW to 25.63 [3][122] Additional Insights - **Market Sentiment**: The end of the U.S. government shutdown eased risk-off sentiment, supporting copper prices [1][31] - **Cement Producers' Strategy**: Cement producers are looking to increase prices to secure more profit by year-end [3][88] - **Steel Mill Margins**: Spot cash margins at steel mills indicate a challenging environment with negative margins for both rebar and HRC [2][75][81] This summary encapsulates the key points from the conference call, highlighting the performance and trends across various sectors within the basic materials industry in China.

China’s carbon prices surged after the government announced the implementation of a plan to include the steel, aluminum and cement sectors https://t.co/nB5XSd4Uc9 ...

Core Insights - Adani Enterprises has successfully secured approval from creditors for its takeover proposal of Jaiprakash Associates, a bankrupt infrastructure firm, although the bid value has not been disclosed [1][5] - The acquisition will grant Adani control over Jaiprakash Associates' diverse business operations, which reported revenues exceeding ₹6,500 crore and assets over ₹35,000 crore for FY25 [1][5] Group 1: Acquisition Details - Adani will acquire 3,985 acres of land in Noida and Greater Noida, 6.5 million tonnes of cement capacity in Madhya Pradesh and Uttar Pradesh, and a 24% stake in Jaiprakash Power Ventures [2] - The acquisition also includes a hospitality business with 867 rooms across five hotels in Delhi, Agra, and Mussoorie, along with construction and fertilizer plants [2] Group 2: Competitive Landscape - Adani Enterprises outbid four other competitors, including Vedanta Ltd, Dalmia Bharat, Jindal Power, and PNC Infratech, to take over Jaiprakash Associates under the corporate insolvency resolution process [2][6] - Vedanta had previously bid an enterprise value of ₹17,000 crore for Jaiprakash Associates but ultimately lost to Adani's proposal, which garnered the most support during the voting process [6] Group 3: Financial Aspects - Adani's resolution plan includes a total value exceeding ₹14,500 crore, comprising ₹6,000 crore as an upfront payment and an additional ₹7,600 crore payable after two years [6] - The net present value of Adani's offer is estimated at ₹12,000 crore, indicating a competitive financial strategy compared to other bids [6] Group 4: Regulatory Process - Following the approval from creditors, Adani Enterprises must now obtain regulatory approvals, including from the National Company Law Tribunal (NCLT) in Allahabad, to finalize the acquisition [7]

Summary of the 2026 India Equity Strategy Outlook Industry Overview - The report focuses on the Indian equity market, highlighting a strong recovery expected in 2026 after a significant underperformance over the past three decades [2][3]. Key Points and Arguments Market Recovery Expectations - Indian equities are anticipated to bounce back strongly in the next 12 months due to supportive policy changes and a recovery in nominal growth, which should enhance earnings growth [3][4]. - The BSE Sensex is projected to have a 13% upside through December 2026, with a target of 95,000, assuming continued macro stability, fiscal consolidation, and increased private investment [4][53]. Economic Projections - GDP growth is expected to be 6.8% for F2026, with a gradual decline to 6.5% in the following years [8]. - Sensex earnings are projected to compound at a 17% CAGR through F2028, with EPS growth of 7.0% in F2026 and increasing to 19.5% by F2028 [4][8][54]. Risks and Concerns - The primary risk identified is a potential slowdown in global growth, which could hinder the upside for Indian stocks despite their low beta [5]. - Concerns regarding the expanding issuance pipeline and poor trailing equity returns are deemed misplaced, as domestic flows remain strong [5][34]. Portfolio Strategy - The recommended strategy favors domestic cyclicals over defensives and external-facing sectors, with an overweight position in Financials, Consumer Discretionary, and Industrials, while underweighting Energy, Materials, Utilities, and Healthcare [6][57]. Structural Changes and Long-term Outlook - India's long-term growth story is reinforced by various reforms, including fiscal consolidation and a shift towards equity ownership among households [3][28]. - The report emphasizes a structural rise in discretionary consumption and improvements in macro stability, which are expected to lower real rates and enhance equity valuations [28][44]. Key Catalysts for Growth - The report identifies several catalysts for growth, including: - A positive growth surprise anticipated in the coming months due to policy shifts and reforms [27]. - The potential for a trade deal between India and the US, which could further boost market sentiment [43]. - The upcoming AI Impact Summit in 2026, which may enhance India's position in the global AI landscape [39][43]. Conclusion - The report concludes that the Indian equity market is poised for a significant turnaround in 2026, driven by macroeconomic stability, policy reforms, and a favorable domestic investment environment [25][44]. Additional Important Insights - The report highlights the importance of demographic advantages and a functioning democracy in supporting long-term growth [48]. - It also notes the potential for a consumption revolution in India, which could attract global investors [48]. This comprehensive outlook provides a detailed analysis of the Indian equity market's potential recovery and the factors influencing its trajectory in 2026.

Core Insights - The Monarch Cement Company (MCEM) has experienced a decline in stock performance, with shares down 3.2% since the third-quarter 2025 results, underperforming the S&P 500's 1.9% decrease during the same period [1] - Year-over-year revenue and earnings have contracted due to weaker demand in Ready-Mixed Concrete operations, with third-quarter net sales falling to $73 million from $80 million [2] - Net income decreased to $25.1 million from $26.4 million, and earnings per share (EPS) fell to $6.44 from $7.21, attributed to lower gross margins and operating income [3] Segment Performance - The Cement business saw a sales increase of $2.8 million, supported by a 1.7% volume growth and favorable pricing, while the Ready-Mixed Concrete business experienced a $9.8 million sales decline due to a 36.6% drop in cubic yards sold [4] - Gross margin pressures persisted, with the consolidated third-quarter gross profit rate slipping to 38.5% from 40.6%, and cement margins narrowing significantly to 49.4% from 57.4% [5] Liquidity and Cash Flow - The company maintains a solid liquidity position, with working capital at $148.9 million as of September 30, 2025, up from $141.2 million at year-end 2024 [6] - Operating cash flow for the nine months declined to $39.5 million from $46.6 million, while capital expenditures reached $25.6 million through September 30, with plans for $40.1 million in full-year capital spending [7] External Factors - Weather-related impacts have constrained construction activity and demand for cement and ready-mix concrete, particularly due to high rainfall during the 2025 construction season [8] - The transfer of certain ready-mix entities to RMCMO Holdings, LLC in December 2024 has affected revenue comparability, with Monarch now reporting its 49% share of RMCMO's earnings separately as equity income [9] Investment Performance - Unrealized gains on equity investments rose to $9.9 million in the third quarter, up from $5.3 million a year earlier, helping to mitigate weaker operating performance [10] - Management reaffirmed its 2025 capital expenditure plan and indicated stable long-term commitments regarding pension and postretirement spending [11] Strategic Developments - The joint venture transaction with RMCMO Holdings, LLC, completed in late 2024, remains the most recent major strategic development, with no significant updates reported [12]

Summary of Conference Call Notes Industry Overview - The conference call focuses on the **China A-shares Equity Strategy** and the impact of the **anti-involution policies** initiated by the Chinese government in late Q2 2025, affecting various industries [2][34]. Key Points and Arguments Anti-Involution Policies - The anti-involution policy aims to shift competition from price and scale to quality, with a projected execution timeframe of about a decade [2]. - The policy is expected to support the **CSI-300's** EPS growth, with a bottom-up consensus estimate of **14.6% year-on-year** for 2026 [2]. Capital Expenditure (Capex) and Inventory Trends - In Q3 2025, **nine out of twelve industries** reported year-on-year cuts in capex, indicating a trend towards quality-based competition [2]. - The **hog, battery materials, dairy, and chemicals sectors** are leading in destocking, with average inventory days decreasing by **13%, 9%, 6%, and 4%** respectively [5]. - Capex reductions in these sectors were significant, with year-on-year drops of **20%, 45%, 22%, and 15%** respectively [5]. Sector Performance - **Battery materials and chemicals** have been recognized for production cuts and ASP stabilization, outperforming the CSI-300 in the second half of 2025 [5]. - The **coal, baijiu, lithium, cement, and solar sectors** are facing inventory pressures due to softer demand against prior capacity expansions [6]. - The **autos and logistics sectors** are increasing capex while reducing inventories, with companies like **BYD** and **Great Wall Motor** pursuing aggressive overseas expansion [7]. Market Dynamics - The **CSI-300 index** is expected to perform well until the end of 2026, supported by shifts in household asset allocation towards equities [7]. - The **battery manufacturer CATL** is operating at nearly full capacity, indicating strong demand for power and energy storage batteries [7]. Fiscal Support and Government Initiatives - Targeted fiscal support from the Chinese government is seen as a potential catalyst for transitioning sectors from active to passive destocking [5]. - Various sectors, including **autos, battery materials, and solar**, have seen government initiatives aimed at stabilizing growth and curbing low-price competition [34]. Additional Important Insights - The **dairy sector** is focusing on high-end products to differentiate from competitors, while the **hog sector** is stabilizing prices through capacity control measures [34]. - The **logistics sector** is shifting from price wars to value-added services, with regulatory support to prevent below-cost dumping [34]. Conclusion - The anti-involution policies are reshaping competition across multiple sectors in China, with significant implications for capital expenditure, inventory management, and overall market dynamics. The focus on quality over quantity is expected to drive long-term growth and stability in the affected industries [2][5][7][34].

Core Points - Amrize has launched a 'Made in America' label for its cement range, emphasizing American manufacturing and quality [1] - The label guarantees that all aspects of the cement, from raw materials to processing and manufacturing, are conducted in the United States [1] - This initiative supports American jobs and local communities while adhering to rigorous U.S. performance standards [1] Company Summary - Amrize's 'Made in America' label will be implemented across its U.S. cement operations [1]

Market Performance - The benchmark indices Sensex and Nifty ended on a flat note after a three-day rally, with Sensex gaining 12.16 points (0.01%) to close at 84,478.67 and Nifty rising 3.35 points (0.01%) to finish at 25,879.15 [1][3][4] - During the trading session, Sensex reached a high of 84,919.43 and a low of 84,253.05 [3] Sector Performance - Among the gainers in the Sensex pack were Asian Paints, ICICI Bank, PowerGrid, Larsen & Toubro, Bajaj Finserv, Bharti Airtel, Sun Pharmaceuticals, Maruti Suzuki India, Axis Bank, UltraTech Cement, and HCL Technologies [4] - Conversely, laggards included Tata Motors' commercial vehicles arm, Mahindra & Mahindra, Tata Steel, Bharat Electronics Ltd, Tata Motors Passenger Vehicles, Trent, Tata Consultancy Services, Hindustan Unilever, and Infosys [5] Investor Sentiment - Investor sentiment was positively influenced by the signing of a short-term funding bill by Trump to end the US government shutdown and expectations of tariff relief for India [6] - Record-low October inflation figures bolstered expectations for an interest rate cut by the Reserve Bank of India (RBI), making rate-sensitive sectors like metals and realty attractive to investors [6] Foreign and Domestic Investment - Foreign institutional investors (FIIs) were net sellers for the third consecutive day, offloading equities worth ₹1,750.03 crore [9] - In contrast, domestic institutional investors (DIIs) continued their buying spree, purchasing stocks worth ₹5,127.12 crore [10] Global Market Context - Asian markets showed positive performance, with indices such as Shanghai's SSE Composite, Hong Kong's Hang Seng, Japan's Nikkei 225, and South Korea's Kospi ending higher [8] - Brent crude oil prices declined by 0.29% to $62.53 per barrel [8]