2024, the Ministry of Industry and Information Technology successively issued documents such as "Measures for the Implementation of Capacity Replacement in Cement and Glass Industry (2024 edition)" and "Notice on Further Standardizing Capacity Management in Cement Industry", aiming at further resolving the serious contradiction of excess capacity in the industry and optimizing the industrial layout, so as to promote the high-quality development of the industry. Over the past year, what is the progress of the current industry's capacity replenishment? What's the effect? This article makes the comb and the analysis from the data angle, for the profession reference!
According to the incomplete statistics of China Cement Network Cement Big Data Research Institute, since last year, 75 clinker production lines in the cement industry have carried out capacity replacement for the purpose of capacity replenishment, involving about 69.299 million tons of capacity, while in the cement industry which is generally overproduced, the cement production capacity has been reduced. This progress is obviously slow. In addition, in the case of capacity replenishment, most of the replacement schemes have been approved, and a few of them have not been approved because they are still in the publicity period, or because the equity problem has not been solved, the compliance problem of the replaced capacity has not been solved, and the planning adjustment has not been passed. There are 8 production lines in this part, including 3 in China Building Materials, 2 in Jinyu Jidong, and 1 in Conch, Jixi Sailong and Nantong Special Cement.
Table 1: List
of Unapproved Projects Information Source: Cement Big Data Research Institute
Guizhou has the largest number of withdrawals and Anhui has the
largest number of placements. Capacity replacement projects that have not yet been announced are excluded, and only approved projects are considered. Up to now, the clinker production capacity has been increased by 22.814 million tons through capacity replacement, and 37.66 million tons have been withdrawn, with a cumulative reduction of 14.846 million tons. In terms of provinces, there are 20 regions to supplement production capacity, 15 net purchase areas and 5 net purchase areas. Among them, the net purchase in Guizhou is the largest, reaching 6.562 million tons, accounting for 8.3% of the total production capacity of the region; the net purchase in Anhui is 2.248 million tons, ranking first; the change of supplementary production capacity in other regions is mostly within 2 million tons, which is relatively small as a whole. Jiangsu, Inner Mongolia, Beijing and Liaoning are the four provinces (cities) with the largest production capacity of 1.395 million tons. Fujian, Hubei and Heilongjiang are areas with only production capacity but no production capacity, of which Heilongjiang has put in 1.473 million tons.
Table 2: Supplementary production capacity
by region Source: Cement Big Data (https://data.ccement.com/)
From the perspective of enterprises with more
reduction in China's building materials and conch cement, China Building Materials and Conch Cement ranked first and second with net withdrawal capacity of 5.596 million tons and 2.816 million tons respectively. China Building Materials has 24 production lines with supplementary production capacity of 7.548 million tons and withdrawal of 13.144 million tons, all of which are owned by its subsidiaries, and the production lines have been integrated and optimized. Production capacity replenishment areas are mainly Zhejiang, Xinjiang, Henan, Sichuan, Heilongjiang, Guizhou, Jilin and other places, of which Zhejiang has the largest replenishment of 1.473 million tons, and the withdrawal of production capacity is within the province. Sixteen production lines of Conch Cement were replenished with capacity of 5.864 million tons and 8.68 million tons were withdrawn, with a net decrease of 2.816 million tons. Anhui region was replenished with 4.1075 million tons, accounting for 70% of the total, of which 1.938 million tons were put into Anhui region due to the withdrawal of Guizhou production capacity. In recent years, the demand in Guizhou region has declined sharply, and the industry efficiency is poor, while Anhui region, as the headquarters of conch, radiates the Yangtze River Delta region, has obvious competitive advantages, which is conducive to optimizing the layout of production capacity and further improving the competitiveness in East China.
Table 3: Supplementary Capacity
of Enterprises Data Source: Cement Big Data (https://data.ccement.com/)
Accelerate the pace of supplementary capacity and effectively reduce excess capacity
. Cement prices have fallen to a historic low level, and the intensification of competition caused by overcapacity is one of the important reasons. Replenishing production capacity is one of the effective ways to effectively reduce excess capacity and optimize the layout of production capacity, but the current progress is obviously less than expected, and in the replacement of replenishing production capacity, there are irregularities such as the revival of zombie production capacity, resulting in new problems. The author suggests that, on the one hand, for enterprises with plans to optimize the layout, they should formulate plans as soon as possible, seize the policy window period, and at the same time, they should reasonably assess the impact on the market in the region where they are located; on the other hand, the competent authorities should strengthen supervision, increase the punishment for enterprises that violate the rules of replacement, fail to supplement production capacity but exceed production capacity, and safeguard the results of replacement of production capacity.
Figure 3: National cement price trend (point)
Data source: cement big data (https://data.ccement.com/)
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