Recently, when forecasting the industry in 2024, Shangfeng Cement said that the 2024 cement industry has difficulties and challenges, but more bright prospects. In
2023, the contradiction between supply and demand in the cement industry will be further intensified, and the market competition will be fierce. According to China Cement Network Cement Big Data Research Institute, the cement output in 2023 will hit a new low in the past 13 years, and the annual profit may be around 31 billion yuan, which is likely to return to 2015.
Data source: Cement Big Data
Let's look at some of the difficulties and challenges facing the cement industry in 2024. From the
supply side, at present, the total production capacity of clinker in China is 1.803 billion tons, but it has not yet reached its peak. In 2023, 16 production lines will be put into operation in China, with a total clinker production capacity of 23.529 million tons. According to the tracking of China Cement Network Cement Big Data Research Institute, 27 clinker production lines with a capacity of more than 40 million tons will be put into operation in China in 2024.
Under the current industry background, the downward demand and the release of new production capacity will further aggravate the contradiction between supply and demand in the industry. In terms of
price, as of December 29, 2023, the national cement price index was 113.37 points, down 28.95 points from the same period last year, with an overall decline of more than 20%.
From the price trend chart, the overall trend of the national cement price in 2023 was downward. As of December 19, the average price of P.O42.5 bulk cement was 343.24 yuan/ton, down 19.7% from the beginning of the year.
As the starting point of cement prices this year is relatively low, it is not a small pressure for the industry to rebound beyond 2023 on this basis. In terms of
cement, real estate, infrastructure and civil market are the three main driving forces for cement demand. However, in recent years, real estate investment has gradually declined, and the demand for infrastructure is difficult to hedge the downward impact of real estate, which has dragged down the demand for cement. Taking 2023 as an example, the national cement output is estimated to be 2.05 billion tons, down 3.3% from the same period last year.
China Cement Network Cement Big Data Research Institute predicts that in 2024, the drag of real estate will be weakened and infrastructure will still be pulled. Cement production in 2024 is expected to be around 2.01 billion tons, down about 2% from the same period last year. With the decline of
demand, the increase of new production capacity and the overall decline of the average price of cement, where is the bright future of the cement industry?
The overall trend is that domestic cement demand has entered a downward cycle. Xiao Jiaxiang, executive chairman of China Cement Association, predicts that domestic cement demand will fall to about 1.5 billion tons by 2030.
However, the grim market situation also means new life. Cement is a large industrial product with rigid demand, and there is no ideal alternative material in the foreseeable future. Even if the market demand declines, in the long run, based on the huge domestic economic volume, the market demand is still large.
After experiencing the "cold winter" period of sharp decline in industry profits, many enterprises with poor competitiveness and poor management have been incorporated or withdrawn from the market, the number of cement enterprises will continue to decrease, and the industry will be forced to enter the stage of capacity clearance.
According to the incomplete statistics of China Cement Network, more than 50 cement plants have declared bankruptcy or entered bankruptcy proceedings in 2023, including some enterprises with clinker production lines of 2000t/d, 4000t/d and 4500t/d.
Particularly noteworthy is that in 2023, cracks have appeared in the long-term "competition and cooperation relationship" in some domestic regional markets, and some enterprises have clearly opposed peak staggering production. Specifically, in the market, the price war has broken out, and the whole cement market has been "undercurrent surging". In the
new year, to what extent and how long can the original "competition and cooperation relationship" be maintained? It will be a question for the industry to think about, but there is no doubt that in the near future, a thorough shuffle may be inevitable.
At the same time, many cement enterprises are actively promoting their own economic growth points, such as Red Lion Cement's "cement + polysilicon" dual-industry pattern; The overseas expansion of Huaxin Cement and the expansion of China Resources Cement from cement to building materials.. At the same time, relying on technological empowerment and technological innovation to build intelligent, energy-saving and low-carbon cement plants has become the focus of the current development of cement enterprises. The
future cement industry is bound to be "surplus is king", and those enterprises with many advantages in market layout, mine resources, cost control, management efficiency and financial cost will be more likely to stand out. The future is bright for the strong and dark for the weak, and the domestic cement industry will eventually enter a new pattern constructed by the strong.
