On April 17, Liaocheng said at a series of press conferences on the theme of "Twelve Promotion Actions" that it would urge Donga Shanshui Cement 2500t/d new dry process cement clinker production line to shut down and withdraw before the end of the year. According to the list of cement clinker production lines issued by Shandong Province, the production line is in a state of shutdown in 2023, and there is no capacity replacement. The policy of implementing the "Three Resolute" Action Plan (2021-2022) for
Shandong Province to eliminate cement clinker production lines of 2500 t/d or less was issued in April 2021, which requires that all cement clinker production lines of 2500 t/d or less be integrated and withdrawn by 2022. Half of the 2500 tons/day cement clinker production line will be integrated and withdrawn, and the remaining 2500 tons/day cement clinker production line must determine the capacity replacement plan, and all of them will be integrated and withdrawn by the end of 2024.
In recent years, the situation of overcapacity in the national cement industry has become increasingly serious, and there are calls in the industry to eliminate part of the capacity through the size of cement clinker production capacity, which is defined by the 2500t/d clinker production line. So if the national cement clinker of 2500t/d and below is eliminated, can the supply and demand of China's cement industry reach a balance?
According to the incomplete statistics of China Cement Network Cement Big Data Research Institute, by the end of 2023, there were 1549 new dry clinker production lines in operation in China, with a total actual clinker production capacity of 1.78 billion tons. Among them, there are 599 cement clinker production lines of 2500t/d and below, involving an annual clinker production capacity of 390 million tons, accounting for 21.9% of the national clinker production capacity. If the cement clinker production lines of 2500t/d and below are eliminated, the annual clinker production capacity in China will be maintained at about 1.4 billion tons. The vision is beautiful, but the reality is very skeletal!
Looking at the demand for cement, the national cement output in 2023 is 2.023 billion tons. According to the data of Cement Big Data Research Institute, the cement output in 2024 will be reduced to less than 2 billion tons. The coefficient of cement clinker is calculated by 0.67, and 1.4 billion tons of clinker can produce about 2.1 billion tons of cement. From the figures, it seems that there is no need to worry about overcapacity at least in recent years.
However, the problem of overproduction is widespread in domestic clinker production lines, and the overproduction of large-scale production lines may be more serious. If the planned capacity under construction is taken into account, about 85 million tons of clinker will be added (considering 1.4 times overproduction). And this is an indisputable reality!
In practice, no one is willing to cancel the production capacity (even backward production capacity) in vain, and weaken the reduction and replacement through various methods, so that the production capacity with low competitiveness can be rejuvenated. It is said that the elimination of backward production capacity has little effect on resolving the serious overcapacity. Even if part of the production capacity is reduced and replaced, it will also find a "supplement" through overproduction. Cement demand will continue to decline in
the next decade, and many industry insiders predict that it will be reduced to about 1 billion tons. Therefore, even if all the production lines of 2500t/d and below are shut down, in fact, the production capacity will still be seriously excessive, and the final result can only be a "fire fight" between "advanced production capacity".
However, although the effect of shutting down all cement production lines with capacity of 2500 tons per day or less is not significant in the short term to alleviate the current overcapacity situation, in the long run, it may be a key step for the cement industry to solve the problem of overcapacity. It
should also be pointed out that the Guidance Catalogue for Industrial Structure Adjustment (2024 edition) stipulates that the new dry process cement clinker production line of 2000 tons per day and above is allowed.
