inventory is full, the peak will be staggered; if the demand is insufficient, the peak will be staggered; if the price is low, the peak will be staggered. In recent years, peak staggering seems to be the "life-saving straw" of the cement industry.
However, the number of days of off-peak kiln shutdown is increasing rapidly year by year, but the effect of off-peak production is weakening year by year. Especially this year, with the further sharpening of the contradiction between supply and demand, the impact of off-peak kiln shutdown on the cement market has been greatly weakened.
2023, Staggering the peak and stopping the kiln is also difficult to save the cement market
2023, the cement market continues to be depressed. According to the analysis of China Cement Network Cement Big Data Research Institute, cement prices in 29 of the 31 provinces have fallen year on year this year. Among them, 6 provinces fell by more than 30%, with Guangxi, Jiangxi and Guizhou leading the decline. It is worth noting that in many provinces with large declines, the intensity of peak staggering has been increased again and again, but this year's cement market can not be saved by controlling production capacity through peak staggering. In December
2023, the price of cement in each province fell more or rose less
. Data source: cement big data (https://data.ccement.com/)
Take Guizhou market as an example, in 2022, The Notice on Staggered Production of Cement Industry in 2022 issued by Guizhou requires all clinker lines to stop production at staggered peak for no less than 60 days in the first quarter, no less than 40 days in the second quarter, no less than 30 days in the third quarter and no less than 30 days in the fourth quarter. By 2023, the peak staggering requirement of the cement industry issued by Guizhou is to shut down the kiln for 60 days in the first quarter, 60 days in the second quarter and 55 days in the third quarter. Kiln shutdown time increased significantly in the second and third quarters. Although the strength of Guizhou cement peak staggering has been increasing, its market has not improved.
As the market continues to be depressed this year, in order to stabilize the market next year, some provinces have already begun to plan ahead of the peak staggering plan for 2024. Among them, from the perspective of industry self-help, Hebei specially held the cement industry 2023-2024 annual peak-staggering production special deployment meeting, requiring: from November 1, 2023 to October 31, 2024, 200 days of peak-staggering production for self-discipline self-help of the industry in Northeast Hebei; 190 days of peak-staggering production for self-discipline self-help of the industry in Central and South Hebei.
It is worth mentioning that in August this year, Hebei issued a notice of cement peak staggering production in 2023-2024, requiring 150 days of peak staggering from November 1, 2023 to October 31, 2024. Unexpectedly, in the past three months alone, Hebei has issued another document to extend the peak staggering to 200 days. Where will
peak staggering production go in the future?
Since the "big trough" of the cement industry in 2015, the staggered peak production has stepped onto the stage of the cement industry, as an important part of the structural reform of the supply side, to a certain extent, it has solved the problem of how to alleviate the oversupply of the cement industry under the excess capacity, so that the cement price can rise steadily, the industry efficiency can be improved rapidly, and the cement industry can be improved rapidly. And successively create the best profits in history.
However, as the national market demand continues to decline, the "magic" of off-peak production is disappearing, and it is difficult for the cement industry to rely on off-peak production to get out of the predicament. As many cement enterprises have said, in the case of serious shortage of market demand in the whole country, full shutdown has become the last choice for some cement enterprises.
So far, many cement enterprises have begun to stand up against peak staggering production, calling on the national cement industry to actively eliminate backward production capacity and fundamentally solve the problem of overcapacity.
In fact, the policy of off-peak production has been controversial since its implementation. At the beginning, it was to avoid the superposition of pollutants during the heating period in autumn and winter, and later in the southern region, it also had the effect of avoiding the peak of electricity consumption in summer. But later, the industry tasted the benefits of off-peak production on the supply side, which became a synonym for kiln shutdown and production restriction, and a way to improve the market situation. At that time, although it was controversial, the voice of opposition to the current interests gradually disappeared.
Nowadays, the accumulated drawbacks of off-peak production have broken out one by one, and the cement industry is once again in crisis, making it even more difficult to get out of the predicament. For example, the main reason for the continuous downturn of cement market is overcapacity, but the off-peak production protects the inefficient capacity to a certain extent, which plays a negative role in effectively resolving the overcapacity and misses the "window" period of resolving the serious overcapacity.
It is worth noting that in the years when the industry enjoyed the high profit period brought by peak staggering production, the new cement production capacity increased sharply, and a large number of new production lines "sprang up", which made the cement industry with excess capacity "worse".
Therefore, in the context of the increasingly prominent contradiction between supply and demand of cement, it is the right way to resolve the serious overcapacity, to adapt the total capacity of the cement industry to the environmental carrying capacity, market demand and resource security, to coordinate the spatial layout with regional economic development, and to achieve a reasonable level of capacity utilization. As an episode in the development of cement industry, peak staggering production will gradually withdraw from the historical stage.
