On March 28, OCC Chairman Ma Weiping and his delegation visited China Gezhouba Group Cement Co., Ltd. and were warmly received by Yang Dan, Deputy Secretary of the Party Committee and General Manager of the company. The two sides conducted in-depth exchanges on the situation of Hubei cement industry and the future development direction of the industry.
Yang Dan said that serious overcapacity is the core problem facing the current industry, and from the future trend of cement demand, overcapacity may be more serious.
According to Yang Dan, if calculated according to the annual demand decline of 5%, the national cement demand will be reduced to about 1.3 billion tons by 2030. In this context, the number of off-peak production days needs to increase by about 15 days per year to maintain the current supply and demand situation, which is very difficult. This is a relatively optimistic estimate. In fact, the domestic demand for cement may fall by 7%. It is expected that the demand for cement in Hubei will fall by about 7% in 2025. This is the current demand situation that the industry needs to face for a long time in the future.
Yang Dan said that in the context of serious overcapacity in the industry, the industry has gradually formed a lot of consensus, such as: insisting on peak staggering production, strengthening enterprise exchanges, giving consideration to both efficiency and sales, and continuously improving capacity concentration, etc. However, even with so many consensus, it is still difficult for the industry to be rational in self-discipline. Yang Dan appealed to the industry that "large enterprises should stress style and small enterprises should stress rules", whether rigid or rational constraints, industry self-discipline needs to be strengthened.
In view of the current situation of the industry, Yang Dan appealed:
1. Stop capacity replacement, especially cross-provincial capacity replacement, the industry has been in a "prisoner's dilemma", to put capacity into practice, in order to cope with the downward trend of demand;
2. The industry has extended from "cement roll" to "whole industry chain roll", including "aggregate roll" and "commercial mix roll", and the enterprises in the industry need to refuse the vicious competition of "internal roll";
3. Maintain reasonable prices and rationally increase or decrease prices. When it rises, it should not be too fierce, and when it falls, it should not be too crazy. The price of cement should be controlled in a reasonable range of 5% -8% to maintain the profit margin, which can not only resist the entry of external cement, but also obtain certain profit returns. Employees have income, enterprises have profits, and the government has tax revenue.
Ma Weiping said that the demand for cement will continue to decline in the future, the market capacity will continue to compress, and the number of enterprises is bound to decrease. Cement industry must strengthen industry self-discipline, strengthen enterprise cooperation, large enterprises should stress the pattern, small and medium-sized enterprises should stress integrity. At the same time, enterprises should adhere to the blade introversion, constantly reduce costs and increase efficiency, control costs and win strategic initiative. Effectively control the supply, jointly shut down the kiln and limit production, and maintain reasonable profits.
OCC is proposed by some cement enterprises, led by China Cement Network, in response to the central "to strengthen industry autonomy, to prevent'involution 'vicious competition." The cement industry organization was established in Nanjing, Jiangsu Province in June 2024. The aim is to prevent involution and adhere to peak-shifting production and capacity reduction on demand. Maintain the prosperity and stability of the Yangtze River cement industry and achieve high-quality development.
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