This year is the sixth year for the Cement Big Data Research Institute to make the top ten forecasts of the industry. In 2023, due to the lack of market confidence and the deep adjustment of real estate, the competition among cement enterprises became more intense, and the benefits of the industry continued to shrink. Our proposed decline in cement demand, increased efforts to stagger the peak, and accelerated transformation of enterprises have all come true. This year, we will continue to work diligently and diligently, and continue to share the prediction of the development trend of the cement industry, market and enterprises in 2024.
I. Demand continues to fall & nbsp; Under the constraints of breaking the platform period
of land transactions and the large decline in new construction area, real estate investment will continue to be weak, and the demand for cement on the real estate side will continue to decline. Under the policy of "steady growth", infrastructure construction will continue to develop, but the demand for cement will weaken marginally, which makes it difficult to hedge the decline in demand caused by the weakness of real estate. We expect cement production to fall to less than 2 billion tons in 2024, breaking the plateau.
II. Clinker production capacity is stable and tends to decline
In 2023, 16 cement clinker production lines were ignited nationwide, with a total capacity of 23.47 million tons, and 36 were withdrawn, involving 28.7 million tons. At the end of the year, the actual clinker production capacity was about 1.78 billion tons, a net decrease of 5.23 million tons compared with 2022. More than 28 new lines (42 million tons of capacity) are planned to be put into operation in 2024. Although the actual progress may still be less than expected, the contradiction of industry surplus will become more acute under the background of downward demand. As the core measure of supply-side reform, peak-shifting
production has played an important role in regulating the relationship between supply and demand in the industry and maintaining price stability. Since 2022, in the face of declining industry demand and fierce market competition, peak staggering efforts have been intensified with little effect, and this effect is expected to continue in 2024.
IV. The cost of market competition is king. In
2023, due to the further shrinkage of industry benefits, the number of bankrupt and withdrawn enterprises increased significantly. Under the background of homogenization of market products, low cost has become an important part of the core competitiveness of cement enterprises. It is expected that the high-cost enterprises represented by lack of mine resources, low management efficiency and poor operating efficiency will further withdraw in 2024, and the number of enterprises will continue to decrease.
Five, industry efficiency will remain low.
We believe that under the severe constraints of weak demand and excess, the average price of cement in 2024 will continue to decline compared with that in 2023, and the profit of cement business in the industry will further decline, but with the extension and transformation of the upstream and downstream chain of the industry. The profit of non-cement business such as aggregate, environmental protection and new energy will increase, and the contribution will continue to increase, but the overall profit of the industry will remain low, and it is difficult to improve significantly.
6. Accelerating the construction of the carbon market & nbsp; The cement industry
is the third largest carbon emitter after power and steel. Reducing the carbon emissions of the cement industry is of great significance to achieve the goal of "carbon peak" and "carbon neutrality". At present, cement enterprises actively carry out energy saving, consumption reduction and carbon reduction work, build talent team, inventory carbon assets, dig deep data system, accelerate the construction process of carbon market in cement industry, and are expected to be included in the carbon emissions trading market this year and next.
VII. Increase in industry concentration & nbsp; Continuous optimization of
competition pattern, high concentration and good competition pattern are the necessary prerequisites for the cement industry to achieve high-quality development. In recent years, the cement industry has made little progress in improving the concentration. At present, the concentration of clinker production capacity of the top ten enterprises is about 59%, which is far behind the developing countries in Europe and the United States. With the increase of market pressure, low-benefit enterprises will accelerate their withdrawal from the market, and the industry concentration will be improved.
8. Expand the industrial chain & nbsp; It is an indisputable fact that there is a serious surplus of aggregate and commercial concrete in new energy
cement and its upstream and downstream industries. Opening up new businesses and rushing to new tracks are the key measures for transformation and upgrading. In the long run, new energy businesses such as photovoltaic power generation and green energy storage have bright prospects, but cement enterprises are less involved. At present, the installed capacity of photovoltaic power generation in the cement industry is about 1GW, accounting for a relatively low proportion. It is expected that in 2024, cement enterprises will continue to increase investment in the field of new energy and make new breakthroughs in transformation and upgrading.
9. Outstanding performance of overseas business & nbsp; Leading enterprises with obvious
advantages In 2023, the domestic cement business had a meager profit, and many enterprises sought to break the situation overseas, especially some large enterprises with obvious advantages and remarkable achievements. Huaxin Cement has completed the acquisition of cement enterprises in Oman, South Africa and Mozambique, and the contribution of Western Cement to Africa has increased. In 2024, with the completion and commissioning of overseas production lines of leading enterprises, it is expected that overseas business will continue to develop.
Ten, the wave of intelligence rises and falls one after another
With the continuous decline of cement demand in China, the competition among cement enterprises has begun to turn to the stage of "internal force competition", relying on digitalization to upgrade technology and management, continuously reduce energy consumption, pollutants and carbon emissions, and then improve operational efficiency and reduce production costs. The key for cement enterprises to cope with the challenges is to ultimately enhance the comprehensive competitiveness of enterprises. Under the "double carbon" policy and the industry's low efficiency constraints, it is expected that cement enterprises will further accelerate the pace of digital empowerment in 2024.
