China Cement Network, the national cement output in 2023 was 2.023 billion tons, with an absolute value of 107 million tons, or 5%; the total profit of the cement industry was more than 32 billion yuan, or about 51%. The demand for
cement has only dropped by 5%, but the total profit of the industry has dropped by more than 50%. In the face of this data, there is a view in the industry that the cement industry has always had a serious problem of overcapacity. In the past few years, the industry has maintained a good situation. The current demand is still very high, and the sharp decline in profits is not normal.
For example, the real profit peak of the cement industry (2018 ~ 2021) is not the period of the highest demand, and the demand for cement is still at a high level during the low tide of the industry from 2014 to 2016 and from 2022 to 2023.
So what is the reason why the industry is in the current predicament? Is the current industry situation justified? The overcapacity of
1、 is further aggravated
, and the problem of overcapacity in the current cement industry is further highlighted. This is mainly reflected in the fact that the production capacity on the supply side has continued to grow due to the promotion of capacity replacement and overcapacity technological transformation, and has not yet reached its peak; on the demand side, the real estate industry has experienced a serious downturn, investment has shrunk, and the demand for cement has declined significantly.
Specific to the capacity utilization rate, the actual utilization rate of domestic cement clinker production capacity was basically maintained at about 65% in previous years, and the actual capacity utilization rate dropped to about 56% in 2023. Recently, there is even a view that the actual capacity utilization rate of cement clinker will be reduced to 50% in 2024. Structural changes
have taken place in the overcapacity of
2、. In the past few years, although the cement industry also faced serious overcapacity, there were seasonal and regional differences.
In the traditional peak season, the contradiction between supply and demand of cement is not very prominent, especially in the southern region, there will even be a shortage of cement supply and demand. Regionally, in the past few years, there was a serious overcapacity in the north, while the problem of overcapacity in the south was slightly better, and the utilization rate of core enterprises in some provinces could even reach 90%.
At present, the above structure has changed significantly, the seasonal and regional differences of cement overcapacity have basically disappeared, and the annual and overall overcapacity has become the norm of the cement industry. In the past few years, it was more difficult to
establish a competitive and cooperative relationship between
3、. In view of the strong demand support and the less prominent contradiction between supply and demand, the benefits brought by kiln shutdown and production restriction can not only cover the related costs, but also create more benefits for cement enterprises. A good competitive and cooperative relationship can be established between cement enterprises. The profits of the industry have risen accordingly.
Nowadays, demand has declined considerably, considering the marginal cost of stopping production and the need to control the core market, it is more and more difficult to implement peak staggering production and industry self-discipline, and the relationship between competition and cooperation is gradually broken. The change
of strategic thinking of
4、 enterprises in the past led to high profits in the industry, which not only attracted a large number of external capital, but also provided an opportunity for some backward domestic production capacity to "change guns". It not only further aggravates the problem of overcapacity, but also seizes the core market of large enterprises and affects the strategic planning of enterprises.
For some large enterprises, it has the meaning of "lifting stones to hit their own feet".
In view of this, once again in the face of the industry downturn, the strategic thinking of the dominant enterprises has undergone fundamental changes, and the former has been chosen for the issue of market or price.
5、's more substantial ammunition reserves
there is a recent view in the industry that it will stop talking only when the company is losing money and its cash flow is unsustainable, and in the past few years, the rich wealth accumulated by the companies in the industry has made the current price competition more fierce and lasting.
At the bottom of the industry in 2015, everyone has a "limited family background", and after a year of continuous losses, they will soon be able to reach a consensus to reduce losses. Now, the high profits in the past few years have not only contributed to the trend of investment in production capacity, but also made cement enterprises quite rich, especially some powerful private enterprises. In the face of the current market downturn,
these enterprises play the role of "destroyer" in the market competition with the help of strong cost competitiveness and rich family background. Even some enterprises with poor competitiveness can hardly lose money to the extent of enterprise shutdown in a short time.
Although we know that the "battle" may run out of ammunition in the end, who is willing to take the initiative to admit defeat and give up the market? Just look at the fight in the auto industry, and it's hard to throw in the towel until the end. The
6、 is pessimistic
about future demand for any product, if it can not be sold, the higher price is empty talk. Cement is the same, in the downturn period of the industry, firmly control the market share, and even increase market expansion efforts to ensure that sales are more in line with the needs of enterprise development than limiting production and guaranteeing prices. The industry is at a low ebb
in 2015, but cement demand can still see hope through real estate and infrastructure. At present, from the objective law of economic development, cement demand will continue to decline in the future, and it is not alarmist to drop to 1 billion tons in 10 years.
Given the pessimism about the future demand for cement, it is more difficult for the dominant cement companies to give up market share to maintain the price of cement.
In the final analysis, the change of market situation is always determined by the relationship between supply and demand. Any theory is pale in the face of reality. As the main body of the market, enterprises will give the answer with their own practical actions.
The market is both a touchstone and a grindstone, which ruthlessly screens the strong and encourages the weak to transform. Look at the ups and downs of the "mud" sea, I don't know who can stand to the end.
