Recently, when asked about the future development of the cement industry, Jidong Cement responded that cement will remain an irreplaceable building material for a long time to come. At present, the contradiction of excess cement production capacity is still prominent, the demand for cement will show a downward trend in the future, and the industry will enter a deep adjustment period characterized by reduction, differentiation and integration.
Jidong Cement said that with the continuous promotion of the national "double carbon" strategy, in the coming period, accelerating the withdrawal of inefficient production capacity, strictly controlling new production capacity, continuously deepening structural adjustment, and high-quality mergers and acquisitions will be the key tasks and development paths of the cement industry. In
2023, the demand of cement industry declined and the market environment fell into a downturn. The total profit of the industry fell by 54.8% year on year, only 30 billion. In 2024, the contradiction between supply and demand of cement is on the rise, and the industry urgently needs to explore a new way out. As Jidong Cement said, speeding up the withdrawal of inefficient production capacity will be an important task for the cement industry.
However, the main practice of the current cement industry does not seem to be so. Although the situation of overcapacity is grim, the demand for cement has begun to decline and the market competition has become fierce, the measures taken in many places are still to limit the utilization of clinker production capacity by increasing the time of kiln shutdown for peak staggering production, and to continue to hope for peak staggering production under the relatively serious air pollution. In order to maintain the balance between supply and demand, we should constantly increase the off-peak shutdown time and reduce the output under the normalization, so as to reproduce the huge profits of the industry that we once had, but we are unwilling to face up to and face up to the increasingly serious problem of overcapacity in the current industry. In March
2020, the Central Committee of the Communist Party of China and the State Council issued the Opinions on Building a More Perfect System and Mechanism of Market-oriented Allocation of Factors. The Opinion points out that we should give full play to the decisive role of market allocation of resources, smooth the channels of factor flow, ensure that different market players have equal access to production factors, and promote factor allocation to maximize efficiency and optimize efficiency in accordance with market rules, market prices and market competition. We should better play the role of the government, improve the operation mechanism of the factor market, improve government regulation and supervision, achieve the organic combination of liberalization and management, enhance the ability of supervision and service, and guide all kinds of factors to gather in the advanced productive forces. The essence of over
capacity is the unreasonable allocation of resources. The fundamental way to solve the unreasonable allocation of resources is to give full play to the decisive role of the market in allocating resources, so as to maximize benefits and optimize efficiency.
Artificial normalization of kiln shutdown can indeed balance supply and demand to a certain extent, but it also hinders the agglomeration of factors to advanced productive forces and the exertion of efficient production capacity, which results in the protection of competitive inefficient production capacity and hinders the withdrawal or transformation of inefficient production capacity. What should the
cement industry do? When communicating with China Cement Network, a leading figure in the industry said that in order to solve the current overcapacity of cement, the only way is to play and rely on the market mechanism and let the market play a decisive role in the allocation of resources. Survival of the fittest, let the inefficient cement enterprises withdraw in time. Instead of using planned economy thinking, it mainly relies on administrative means, which limits the play of superior enterprises.
These people said that the current reduction in demand for cement is in line with the law of economic development. Now, in the context of declining demand, not all cement enterprises are having a hard time, some are still doing well, but their profits are relatively reduced. The market layout and resource allocation of cement enterprises with good life must be reasonable. The opinions of the above-mentioned
people coincide with those of Jidong Cement. As the saying goes, great minds think alike!
