After the first month of the lunar new year, migrant workers typically return to cities, marking the start of construction activity. According to Mr. Yang, head of procurement at a Henan-based construction company, real estate projects will begin to pick up significantly after mid-February, as labor availability improves.
Over the past decade, China's urbanization rate has accelerated rapidly. It increased by roughly 1 percentage point annually and surpassed 50% for the first time in 2011. Experts predict that by 2020, the rate could exceed 60%, which is a major positive factor for the building materials sector. Mr. Yang believes that the building materials market in 2013 will see a noticeable improvement compared to 2012. However, he notes that the real estate market still needs time to fully recover, meaning the building materials industry will continue to undergo a period of adjustment.
The glass market, a key component of construction materials, has already started showing signs of recovery. Reports from glass processing companies indicate that orders are strong, with many firms increasing their inventory ahead of the holiday season. One company official stated, “Even if we fully stock our warehouses, the existing orders will be enough to cover the stock.†He expects a price increase in the glass spot market following the Lunar New Year.
Zhao Jin** analyst Shan Xiuyu agrees with this outlook. She estimates that prices will rise after the first month of the lunar new year, though the process will be gradual. She also pointed out that the recent cold weather in northern regions has slowed down construction activities, so the market recovery is expected to move from south to north.
Jiao Yonggang from Jinjing Technology Co., Ltd. mentioned that a recent meeting of the Northeast Glass Enterprise Consortium decided to raise winter storage prices by RMB 6 per unit. This decision reflects optimism across both upstream and downstream sectors of the industry.
Meanwhile, rebar, another key material in construction, has also shown strong performance. With the economy recovering slightly, steel mills have raised factory prices, and raw material costs have climbed. Some construction sites are starting projects earlier than usual, creating favorable conditions for the post-holiday steel market.
According to data from 13 cities monitored by Centaline Property, residential land supply increased by about 59% in January 2013. Many developers remain confident due to strong sales in 2012. An industry insider noted that the overall improvement in the building materials market after the Spring Festival is clear, and this trend is expected to boost demand for products like glass and rebar in the coming months.
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