[Today's Hot Review] Coal Profits Break Trillion! One "goes up to heaven" and one "goes down to earth"! If the cement industry does not make up its mind to do this, it will be too late!

What! Last year, the revenue of coal enterprises was 4 trillion yuan and the total profit was 1 trillion yuan. This is simply "coal gold"!

We know that the profits of the coal industry increased by 44% last year, but the profits of the cement industry, which is downstream, decreased by 60%. What is the reason for the huge gap between the two industries?

Things have changed since five years ago.

Here is a chart of the profit trend of the coal and cement industries in recent years. Careful partners can find that during the 18 years from 2000 to 2017, the profit trend of the two industries is basically synchronized. After 2018, the profit trend between the two went to two extremes! One "goes up to heaven" and the other "goes down to earth".

Next, we will analyze the reasons for this extreme phenomenon from three aspects of demand, capacity and cost.

The first is the difference in demand changes. After

2018, cement demand entered a plateau period, and even showed a shrinking trend as a whole, with cement consumption declining by more than 8% in the past five years. On the contrary, the demand for coal is increasing year by year.

Let's take a look at the situation of capacity reduction in two industries.

From 2016 to 2020, the coal industry took drastic measures to reduce production capacity, withdrawing a total of 5500 coal mines and more than 1 billion tons of backward coal production capacity. Direct "rigid" capacity removal.

However, the method used by the cement industry to reduce production capacity is "flexible", which leads to the increase of cement production capacity instead of decreasing. (According to the National Bureau of Statistics, the national cement production capacity was 3.44 billion tons in 2015 and 3.5 billion tons in 2021).

Finally, the cost side.

As the main fuel of the cement industry, the rise in coal prices last year made the cement industry very passive. Coal rises, cement catches up, but due to factors such as overcapacity and poor demand, it is difficult for cement prices to catch up with coal, and industry profits are compressed. Once the price of coal is reduced and the focus of cement cost is shifted down, the price of cement will be more difficult to stabilize.

In recent years, with the continuous advancement of the "double carbon" goal, the era of low coal price is gone forever, and the era of high cost of cement is also coming. With high cost and overcapacity, it is urgent to reduce the production capacity of cement rigidity.

If you want to know more about cement, please pay attention to China Cement Network.

In order to further promote the green, digital and intelligent development of the cement industry, China Cement Network will be launched on April 24-25, 2023. The "China Cement Industry Green Development Summit Forum and Ultra-clean Emission Technology Exchange Conference" and the "Fourth China Cement Intelligent Summit Forum" were held in Changsha, Hunan Province, inviting industry experts, cement and related enterprises. Jointly promote the high-quality development of the cement industry! After the meeting, we will visit Sinoma Zhuzhou Cement Co., Ltd. and the first set of international "one-box SCR denitrification project of dust and nitrate".

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