After the Lantern Festival, the building materials market is expected to gradually warm up. According to Mr. Yang, head of procurement at a construction company in Henan, migrant workers usually return to cities after the first month of the lunar calendar, which means the real estate sector typically starts to pick up around mid-March. This timing significantly influences the demand for building materials.
Over the past decade, China's urbanization rate has risen rapidly, increasing by about 1 percentage point annually and surpassing 50% for the first time in 2011. Experts predict that by 2020, the urbanization rate could exceed 60%, which bodes well for the building materials industry. Mr. Yang believes that the overall performance of the building materials market in 2013 will be much better than in 2012. However, he also notes that the real estate market still needs time to fully recover, meaning there is a period of adjustment ahead.
The glass market, as one of the late-arriving construction materials, has already started showing signs of recovery. Reports from glass processing companies indicate a surge in orders, with many firms increasing their inventory before the holiday season. One executive from a glass company said that even with full stock levels, current orders are sufficient to cover the existing supply. He expects a price increase in the spot market following the Lunar New Year.
Analyst Shan Xiuyu from Zhao Jin** agrees that prices may rise after the first month of the lunar calendar, though the process will likely be gradual. She points out that the recent cold weather in northern regions has delayed construction projects, so the market recovery is expected to move from south to north.
Jinjing Technology Co., Ltd.'s Jiao Yonggang 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 the optimism of both upstream and downstream industries regarding future market conditions.
Rebar, another key material in the building materials sector, has also shown strong performance. With the economy recovering slightly, steel mills have raised factory prices, and raw material costs have increased. Some construction sites have even begun work earlier than planned, creating favorable conditions for the post-holiday steel market.
According to data from 13 cities monitored by Centaline Property, residential land supply increased by approximately 59% in January 2013. Many developers remain confident in the market outlook due to strong sales in 2012. An industry insider predicts that the building materials market will see a clear improvement after the Spring Festival, with products like glass and rebar gradually rising in price.
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