In recent years, domestic cement demand has continued to decline. Since the beginning of 2023, domestic cement prices have been under great downward pressure, and price wars have broken out in many places. Even in popular areas such as East China, cement prices have fallen to a historical low. In view of the situation of the real estate industry, the industry is not optimistic about the future demand for cement, and is full of confusion about the market trend.
In this regard, recently, China Cement Network and Dr. Ma Weiping, former chairman and president of Yaobai Cement Group, had a detailed exchange on how the cement industry should cope with the current market changes and what challenges the industry will face in the future.
Ma Weiping believes that the current cement industry, like 2015, has encountered a period of economic transition. Faced with the decline of real estate, infrastructure and the overall economic situation, the demand for cement has shrunk and the contradiction between supply and demand has intensified, which has led to the industry situation entering a low ebb. However, compared with 2015, the current industry is still facing two major differences. In terms of the contradiction between
supply and demand, the actual production capacity of the current cement industry has increased significantly compared with 2015, and because a large number of production lines have not yet been put into operation, the domestic cement production capacity has not reached its historical peak. On the one hand, production capacity continues to grow, on the other hand, demand has entered a downward cycle. Under the combined influence of both, the current contradiction between supply and demand is more acute, the degree of overcapacity is more serious than in 2015, and it is more difficult for the industry to get out of the predicament than in that year. In terms of
market prospects, there is still a large development space in the domestic real estate and infrastructure sectors in 2015, which provides a strong support for the subsequent recovery of cement demand. However, the current real estate market has been saturated, and after large-scale construction in infrastructure in recent years, the space is getting smaller and smaller, and the future demand of the cement industry lacks support. Ma Weiping even judged that this year may be the last year for China's cement production to remain above 2 billion tons.
In view of the current industry situation and the future trend of cement demand, Ma Weiping believes that the industry should form a consensus on supply, demand and future situation. In the
short term, supply side measures such as peak staggering production are still a temporary means for the industry to save itself in the current market situation, but not a long-term solution. Since the implementation
of off-peak production, the scope has been expanding, from the northeast to the north, and then to the whole country; the time has been extending, from winter to summer, and now almost every month off-peak production. However, with the intensification of the contradiction between supply and demand, the intensity of peak staggering production is increasing, but the effect is getting worse and worse.
The industry should realize that supply-side measures such as peak-staggering production can not fundamentally solve the contradiction between supply and demand, let alone put "treasure" on peak-staggering production. It should recognize the reality of the industry and find a way out for long-term development. In the
long run, domestic cement demand will decline substantially, and it is urgent to reduce production capacity.
Ma Weiping said that the current domestic per capita consumption of cement is still about 1.4 tons, far higher than per capita consumption of 400 kg in developed countries in Europe and the United States, and the domestic per capita consumption of cement may drop to about 700 kg in the future.
At the same time, in view of the declining speed of cement demand in developed countries such as Europe, America and Japan after entering the downward channel, and taking into account the needs of China's economic construction and consumption habits, the domestic cement demand may drop to about 1 billion tons in the next 8-10 years.
In this context, it is imperative to accelerate capacity removal and promote green and high-quality development of the industry. To this, Ma Weiping gives a few proposals:
1, cancel productivity replacement. Over the past few years, capacity replacement has not really solved the problem of overcapacity in the industry, and even allowed a large number of zombie capacity and backward capacity to turn into advanced capacity with the help of capacity replacement. In addition, the overcapacity of new large-scale production lines is large, which leads to the increasingly serious problem of overcapacity in the industry.
2. Stop technical transformation for the purpose of production expansion. In recent years, a large number of domestic cement enterprises have vigorously promoted the transformation of production. The actual production capacity of a 5000 t/d production line may reach 7000-8000 t/d after transformation, which aggravates the problem of overcapacity. It is suggested that enterprises should be restricted to carry out technological transformation for the purpose of expanding production by setting energy consumption quotas and carbon quotas.
3. Eliminate backward production capacity. Constraints such as energy consumption indicators, environmental protection indicators and carbon emission intensity are used to force backward production capacity that does not meet the requirements to withdraw from the market, thereby resolving overcapacity and improving the overall development level of the cement industry.
4. Accelerate the high-quality development of the industry. The industry needs to intensify its efforts in green mines, resource utilization, pollutant emission reduction, carbon emission reduction and intelligent construction.
Ma Weiping lamented that the current cement production capacity is about 3.5 billion tons, and the probability will drop to about 1 billion tons in the next 10 years. If substantial results can not be achieved in resolving overcapacity, the capacity utilization rate will be less than 30%. Resolving overcapacity is imminent, and the industry will become more and more difficult and the market situation will become worse and worse.
About Dr. Ma Weiping:
Dr. Ma Weiping, graduated from Tongji University in Shanghai in February 1982, Ph. D. in Materials Science, Pennsylvania State University, USA. He has worked in the building materials industry for 41 years. He has successively served as senior process engineer and manager of product development department of Holcim Group in the United States, vice president of Lafarge Group in China, senior consultant of Southern Cement Group, president and chief representative of Italian Cement Group in China, chairman and president of Yaobai Cement Group, president of Western Cement, and chairman of Yaobai Cement Group. Vice President of China Cement Association.
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