Guangxi: Continuous Release of New Production Capacity, Intensifying Contradiction between Supply and Demand

Market news shows that the downward trend of cement prices in Guangxi has been obvious since April, with most of the declines in 70-80 tons and 90 yuan/ton in some areas. A

local cement industry personage said that the decline in cement prices in Guangxi was mainly caused by the increasing contradiction between supply and demand.

It is understood that the demand for cement in Guangxi has declined significantly since this year due to the decline in real estate situation and insufficient capital construction. The overall decline in the first half of the year may reach 2-3%, and the annual demand is expected to be less than 70 million tons. In sharp contrast

to the downward trend of the demand side, the supply side of Guangxi cement has continued to increase in recent years. According to the data of China Cement Network, in 2022 alone, 11.873 million tons of new cement clinker production capacity will be put into production in Guangxi, and the total production capacity of cement clinker in Guangxi will reach 103 million tons, ranking fourth in the country.

The above-mentioned professionals further pointed out that, unlike other places, the cement industry in Guangxi is dominated by large-scale production lines, with 75 production lines in the whole region, only 11 below 2500t/d, most of which are production lines of 5000 tons or more, and the actual cement production capacity exceeds 170 million tons. However, in 2022, the demand for cement in the whole region is only more than 70 million tons, and the export of cement is more than 90 million tons, resulting in a serious overcapacity.

"After the new production line is put into operation, market space is needed, but the overall market demand is shrinking, and pressure at both ends leads to great downward pressure on the market," said the industry insiders.

As for how to alleviate the current contradiction between supply and demand, the industry believes that carbon emissions can be used as a powerful binding indicator. Quantitative allocation of carbon emissions according to the design capacity of each enterprise can not only alleviate the problem of overcapacity, but also accelerate the low-carbon development of the industry and create a more favorable development environment for advanced enterprises.