On July 30, the Political Bureau of the CPC Central Committee held a meeting to analyze the current economic situation and deploy economic work in the second half of the year. The meeting stressed the need to strengthen industry self-discipline and prevent "involution" vicious competition. This new formulation has become the focus of widespread concern and heated discussion in the industry recently. The requirements put forward at the meeting of the Political Bureau of the
CPC Central Committee are highly pertinent. It is necessary to prevent and correct the vicious competition of "involution" and create a clean and healthy environment for the development of cement industry. Cement industry can not engage in "involution" vicious competition, "volume" can not afford to "volume" can not win. To respect the market, technology and talents, today's cement industry should maintain a rational and scientific attitude than ever before.
With the continuous downturn of the market, the cement industry fell into a loss dilemma in the first half of the year, which is not conducive to the high-quality development of the industry. At the meeting of the Political Bureau of the Central Committee of the Communist Party of China on July 30, 2024, it was proposed that "industry self-discipline should be strengthened to prevent vicious competition.". Strengthen the mechanism of survival of the fittest in the market and smooth the exit channels of backward and inefficient production capacity. In order to implement the spirit of the Third Plenary Session of the Twentieth Central Committee of the Communist Party of China and the spirit of the recent meeting of the Political Bureau of the Central Committee of the Communist Party of China, prevent "involution" vicious competition, restore the fragile situation of ecological construction in the cement industry, promote cement enterprises to regain confidence, overcome difficulties and challenges, and regain confidence in steady growth, the following proposals are issued to the whole industry:
At present, the cement industry is experiencing unprecedented market challenges and structural transformation. Insufficient demand for cement is the general trend of the economic cycle, which is irreversible in the short term. This is determined by the economic development cycle and is a problem in the process of development and transformation. The disorderly competition and mutual involution among enterprises will lead to the loss of the whole industry, which is not conducive to the sustainable and healthy development of the industry. The healthy development of the industry requires us to advocate the concept of fair competition and win-win cooperation. We should not only take the initiative to respond, but also maintain strategic strength and firm confidence in development.
2. Adjusting the balance
between production and sales at the meeting of the Political Bureau of the Central Committee on April 30, it was pointed out that "the sustained economic recovery still faces many challenges, mainly due to insufficient effective demand, greater pressure on enterprises, more risks in key areas, and the lack of smooth domestic circulation". We should rationally look at the current situation of cement industry reduction under the downward situation of the domestic cycle, organize production activities according to market demand, actively control the quantity from both ends of production and marketing, reduce the quantity with the trend, do not fight price war, do not compete for share, and achieve "quantity reduction without profit reduction" or "quantity reduction with profit increase" by strengthening supply-side control; Pursue quality management and effective development, reduce production and consumption intensity, and reduce ineffective supply.
3. Resolutely implement the on-demand production mechanism
. On May 23, 2024, the State Council issued a circular on the Action Plan for Energy Conservation and Carbon Reduction from 2024 to 2025, pointing out that by the end of 2025. The national cement clinker production capacity will be controlled at around 1.8 billion tons. We will strengthen the regulation and control of the production capacity and output of the building materials industry, strictly implement the replacement of cement production capacity, strengthen the monitoring and early warning of the output of the building materials industry, and promote the normalization of cement peak staggering production. Under the current situation, peak staggering production is still the most effective way to promote structural reform on the supply side and improve the serious contradiction of excess capacity in the industry. The whole industry needs to strictly implement on-demand production, scientifically formulate production plans for September-December, and consciously and actively implement them, so as to effectively achieve precise, rigid and normalized peak staggering production, reduce resource consumption, reduce ineffective supply, and maintain a dynamic balance between supply and demand.
All OCC Members
September 9
, 2024