In recent years, the domestic demand for cement has continued to decline. Since the beginning of 2023, the downward pressure on cement prices has been enormous, 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. How should
the industry view the current situation? How to deal with it next?
Recently, Wang Jianchao, vice chairman of Conch Cement , shared his views on the current situation of the cement industry. Wang Jianchao believes that the current cement industry has encountered unprecedented difficulties. What is
the current industry situation?
Thanks to the reform and opening up and the rapid development of domestic economy, cement has experienced a period of great development. Through digestion, absorption and re-innovation, cement equipment has been localized, cement process structure adjustment has been completed, and the top 50 cement industry has been achieved. With the national cement production reaching its peak in 2014, the domestic demand reached its turning point in 2015, the cement demand entered a plateau period, and the cement demand basically fluctuated between 1% and 3%.
Later, the industry began to implement off-peak production, everyone responded positively, "13th Five-Year" cement industry even in the case of overcapacity, still achieved better economic benefits. At the same time, it also conforms to the requirements of national green development, increases investment in R & D and technological transformation, and achieves high-quality development of environmental protection and green. Under the background of capacity replacement and technological transformation, the supply of the
"14th Five-Year Plan" cement industry has further increased, but the demand is declining. On the one hand, the continuous downward trend of real estate has not yet bottomed out, and the demand for real estate accounts for 36%-38% of the total consumption of cement. In the first half of this year, the total real estate investment, construction area, new construction area and other data continued to decline; land acquisition area continued to decline on the basis of last year's sharp decline, construction area and new construction area affected the current cement demand, and the decrease in land acquisition area indicated the decrease in cement demand in the next few years. The decline in the
real estate industry also has an impact on infrastructure. In local areas, land finance accounts for a large part. At the same time, due to the decline in the real estate industry, the related taxes are also declining, resulting in the transformation of infrastructure less than expected. Many local governments want to do local infrastructure, due to insufficient investment, demand will shrink, further limiting the recovery of cement market demand.
In addition, construction machinery sales also fell by 40%, here we can see the future trend. It is optimistically estimated that the demand for cement will drop by 15% -20% during the 14th Five-Year Plan period; it is neutrally estimated that the demand will drop by 20% -25%; and it is pessimistically estimated that the demand may drop by about 30%. This is the current situation facing the industry.
How to change and respond to the current situation?
1. The cement industry needs to make concerted efforts to improve the supply-demand relationship.
2. To accelerate technological innovation and promote transformation and upgrading, the top 50 enterprises must strengthen technological innovation and management innovation in order to maintain their leading edge.
3. Promote the green development level of the industry to a new level through carbon reduction. Conch Cement has three carbon reduction dimensions, namely, technical carbon reduction, market-oriented carbon reduction and new energy carbon reduction schemes such as photovoltaic, carbon sink and wind power generation.
4. Resolutely curb blind new production capacity. At present, the demand is declining, the supply is increasing, and the market is declining. If we can not control the production capacity, as a resource-consuming industry, it is difficult for cement to play its resource value.
Large enterprises should unify their thinking and understanding, "big rivers have no water and small rivers are dry", and large enterprises should do a good job of peak staggering production in each region, leading small and medium-sized enterprises in the region to jointly promote. The new production line has become a high-quality non-performing asset because of its low productivity.
In the future, the demand for cement will decline, and the problem of overcapacity is serious. The industry needs to strengthen policy promotion, promote energy consumption, carbon emissions and other aspects, and achieve the healthy development of the industry. Associations and large enterprises should actively promote the dual control of energy consumption and carbon emissions, as well as carbon emissions trading, so that the industry has a healthy future.
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