In 2022, under the impact of unexpected factors such as frequent sporadic epidemics and the downturn of real estate, the demand for cement fell off a cliff unprecedentedly. On the contrary, the price of raw material coal continued to rise, which led to the long-term high cost of cement, and the cement industry in China was struggling. The cement industry in Guizhou seems to be more difficult in 2022. Imbalance between
supply and demand. In 2022, each clinker line stopped production for an average of 230 days
. China Cement Network and an industry insider who has observed the development of Guizhou's cement industry for a long time learned that the actual annual cement production capacity in Guizhou is about 150 million tons. In 2017-2018, the demand for infrastructure projects was released centrally. The demand for cement in Guizhou Province remains at a relatively high level, and the peak demand is estimated to exceed 110 million tons.
However, the demand for cement in Guizhou has been weak since the end of poverty alleviation in 2019. Now, under the influence of the epidemic and the sluggish real estate industry, the demand for cement has declined even more seriously this year. It is estimated that the annual cement output in Guizhou will reach only 62 million tons in 2022.
Figure 1: Cement Production in Guizhou 2016-2021 Unit: 10,000 tons
"Statistics Bureau data show that the cement output of Guizhou from January to November 2022 is 58.53 million tons, and the output in December is expected to be basically maintained at more than 4 million tons, so the cement output of Guizhou in 2022 is about 62 million tons." According to the above-mentioned analysis, Guizhou's cement output in 2021 was 93.2835 million tons, down 33.5% year on year.
It is reported that due to poor demand, in 2022, Guizhou cement industry once again increased the intensity of off-peak kiln shutdown to alleviate the serious imbalance between supply and demand. Take the fourth quarter as an example: in previous years, the kiln shutdown time in the fourth quarter in Guizhou was usually 20 days. With the decline of demand in 2021, this time has been increasing, from 20 days to 30 days, and then to 40 days. In the fourth quarter of 2022, the kiln was directly shut down for 60 days, accounting for two-thirds of the whole fourth quarter. In
fact, many cement enterprises have already taken the initiative to shut down the kiln due to insufficient demand and the time far exceeds the requirements of peak staggering production. "Even if we do not issue a notice to extend the peak staggering, the clinker line of enterprises will not be able to open." The above-mentioned professionals said frankly that on the whole, each cement clinker line in Guizhou Province will stop production for an average of 230 days in 2022. Most cement enterprises lose money
in 2022 and how to go against the trend in 2023? In June 2022,
China Cement Network investigated the Guizhou market and learned that in the first half of 2022, due to the sharp decline in demand, market competition in many places became white-hot, cement enterprises restarted the "price war", and the price of cement in Guizhou was more complex. The original self-discipline confidence of cement enterprises gradually disintegrated and began to seize the market at a low price to protect themselves. According to the long-term tracking of Guizhou cement price changes by China Cement Network, cement prices fell all the way in the first half of the year and rose only in August.
Figure 3: Price Trend Chart of Cement in Guizhou in 2022 & nbsp; Unit: yuan/ton
"For the whole year, the average price of cement in Guizhou in 2022 will remain at a general level, but as the production cost per ton of cement has reached more than 300 yuan, the profit of the cement industry in the whole province is not good." According to the above industry sources, most enterprises are losing money. With
serious overcapacity and cliff-like decline in demand, how will the cement industry in Guizhou develop in 2023?
"There is no sign of improvement in cement demand at present, and we expect cement demand in 2023 to be the same as in 2022." The industry insiders mentioned above said frankly that the current real estate start-up rate in Guizhou is very low, major projects are relatively few, and funds are not in place. On the supply side, Guizhou will still be in the stage of serious overcapacity for a long time. In this regard, he believes that the most urgent task is to self-discipline the industry, increase peak staggering, jointly safeguard the industry ecology, and promote the high-quality development of Guizhou cement industry.
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