the National Bureau of Statistics show that from January to December 2022, the national cement output was 2117.95 million tons, down 10 from the same period last year.
Against the background of a sharp decline in demand, the domestic cement market continued to be depressed in 2022. Data from China Cement Network show that from the beginning of last year to the end of last year, National 
in 2022, which is the coldest year since 2016. In the face of a 60% decline in industry profits, we can't help asking, "How did all this happen?"?
1. The downturn of the real estate industry has seriously dragged down the demand
for cement. The prosperity of the real estate industry over the past 20 years has strongly supported the domestic cement market demand, which accounts for about 35% of the total domestic cement demand, and even more than 50% in some regions.
The downward trend of the real estate industry directly led to the decline in cement demand. In the
recent performance forecasts of major cement listed companies, it is clearly pointed out that the decline in the growth rate of investment in real estate development is an important reason for the decline in market demand, cement production and marketing prices and sales. Coincidentally, in 2015, the domestic cement output declined by 4.9% compared with the same period last year. When the industry came to a big trough, the performance of real estate investment was also poor. The growth rate of real estate investment in that year was only 1.0%, which was 9% lower than that in 2014.
Of course, in addition to the decline in real estate investment, the impact of epidemic factors on the cement market last year can not be ignored. The two epidemics at the beginning and end of the year not only affected the start-up speed of the cement market, but also limited the development of the traditional peak season at the end of the year, which greatly affected the demand for cement.
For example, at the beginning of last year, after the outbreak of the epidemic in Shanghai, the project came to a standstill, which gradually affected the effective recovery of the market demand in the Yangtze River Delta, directly led to the cement market in the Yangtze River Delta into a quagmire, and even broke out a local price war. In addition, according to the data of Shanghai Cement Association, the cement consumption in Shanghai in the first half of last year was 22.5815 million tons, down
18.2% from the same period last year. The high price of coal made cement enterprises worse
. Coal is the main cost source of cement clinker, accounting for 50% -70% of the cost of cement production. According to the energy consumption of 150 kg of physical coal per ton of clinker, the cost of clinker will increase by about 15 yuan for every 100 yuan increase in coal price.
In 2022, due to the imbalance between supply and demand in the market, there are two peaks in the coal price, one is that the coal price continued to rebound from January to March and reached the highest point of the year, reaching 1669 yuan/ton; the other is that the price was 1620 yuan/ton at the end of October. The annual average price of coal in China is about 1280 yuan/ton, so the cost of coal per ton of clinker is close to 200 yuan.
Conch Cement, Tianshan Stock, Jidong Cement, , the cement industry still continued the high cost in 2021, but the market was not like the" roller coaster "in 2021. While the overall demand for cement declined in 2022, coal prices rose sharply year-on-year, and the high cost of cement production "eroded" most of the profits of the cement industry.
"Man-made disaster": Overcapacity is still severe, and there is a
10.8% drop in production. Although there is a huge drop in production, the national cement output will still reach 21 in 2022. In addition to external objective factors, the problems existing in the industry itself can not be ignored.
1. The unexpected decline in demand triggered market panic
. In 2022, the decline in cement market demand exceeded the expectations of most industry insiders. Especially in the first half of the year, the continued downturn in market demand after the beginning of the year once triggered a local market stampede. Statistics from
the National Bureau of Statistics show that the domestic cement output in June was 196 million tons, a decrease of 12.1-9% compared with the same period last year.
Especially in the second quarter, it was the peak season of the cement market in the first half of the year, but due to the decline in real estate investment and repeated epidemics, road transportation was not smooth. Influenced by factors such as limited personnel flow, the decline in cement production expanded, especially in April and May, the growth rate of cement production in a single month declined to -18.
Affected by the unexpected decline in demand, the fierce competition in the core cement market, including the Pearl River Delta and Yangtze River Delta, continued to escalate in the first half of last year, and price wars broke out in some regions. In previous years, when the price was high, the ex-factory price of cement in the Pearl River Delta market once fell below the cost price, and most enterprises operated at a loss.
2. The problem of overcapacity has become increasingly prominent
in the cement industry for a long time. In order to curb the problem of overcapacity, as early as 2009, the State Council issued the Notice on Restraining Overcapacity and Redundant Construction in Some Industries and Guiding the Healthy Development of Industries (Guo Fa [2009] No.38). It is required to resolutely curb overcapacity and redundant construction of cement production capacity.
Over the past decade, the government and the industry have made a lot of efforts to solve the problem of overcapacity, but the problem of overcapacity in the cement industry has not been solved from the root.
In recent years, after the introduction of the capacity replacement policy, the original intention is to gradually resolve the problem of overcapacity through capacity reduction and replacement, but in the actual implementation process, there have been a number of problems, such as small building, zombie capacity revival, which greatly reduces the efforts to resolve overcapacity.
For example, in the actual implementation process, the design capacity of some new production lines is 8000t/d, but the actual capacity exceeds the 10000 t/d; some cement clinker production lines are on the verge of bankruptcy, or even have been semi-suspended or suspended for many years, through capacity replacement, they are transformed into advanced capacity, aggravating the problem of overcapacity.
In addition, the rise of production and transformation in recent years has also exacerbated the crisis of overcapacity.
Taking a large cement province as an example, in 2022 alone, at least 20 production lines have completed technological upgrading and transformation, and the production capacity has been greatly increased. Some cement plants have a production capacity of 5000t/d, and the actual production capacity reaches about 8000t/d, which makes the market with serious overcapacity even worse, and the actual overcapacity rate of local cement clinker reaches 50%.
Nationwide, according to the data of China Cement Network, the current national cement production capacity is about 3.8 billion tons, with a surplus rate of about 44%. Nowadays, under the background of declining market demand, the problem of overcapacity of domestic cement is further highlighted.
3. Declining confidence in the industry and cracks
in the relationship between competition and cooperation The problem of overcapacity in the cement industry has always existed, but in the past few years, the industry has maintained a good development trend, and the total profit has reached a new high. One of the important reasons is that after the industry downturn in 2015, the industry has formed a good competitive and cooperative relationship driven by peak staggering production and supply-side structural reform.
demand is the fuse of the decline in the market situation of the cement industry in 2022, and the change in the relationship between competition and cooperation in the industry has greatly magnified the impact of the decline in demand on the cement market.
At present, the domestic cement industry has entered a new development cycle, and the market demand is difficult to restore the previous high level. In the context of serious overcapacity, the industry will probably continue to face tremendous pressure from the supply side in 2023. In view of the experience and lessons learned in 2022, if the cement industry can not rebuild mutual trust and repair the rift between competition and cooperation, the industry situation may deteriorate further. On the afternoon of March
14, China Cement Network will hold the "Round Table Forum of 50 People on Cement Economy" in Hangzhou, inviting 50 + leaders to participate in the discussion, hoping to form a consensus, promote the industry economy on the right track and achieve high-quality development. Can cement industry be revitalized in
2023? Can cycle be repeated?
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