For a long time, China's cement industry has been mired in overcapacity, and the imbalance between supply and demand has become the core crux restricting the high-quality development of the industry.
In order to solve this dilemma, the capacity control policy is constantly iterating, and "production according to approved capacity" is one of the most concerned capacity policies in the industry. However, relying solely on forcing enterprises to produce according to the approved capacity can not achieve the goal of effective capacity removal, nor can it improve the current situation of imbalance between supply and demand in the industry, which is essentially a superficial regulation of "curing the symptoms but not the root causes" and can not touch the core of industry contradictions. Production
according to approved capacity has no substantial effect on capacity removal, the core of which is that it fails to touch the root cause of excess capacity, and only stays on the surface of "standardizing production behavior" rather than core of "reducing the total excess capacity". The overcapacity of China's cement industry is not due to the short-term behavior of "over-approved production capacity", but the inevitable result of extensive expansion and the disconnection between capacity planning and market demand for a long time.
According to industry estimates, the proportion of overproduction of cement clinker in China is more than 20% -40%, but this phenomenon is only the "appearance" of overproduction, not the "root cause"-even if all enterprises strictly follow the approved production capacity. The existing compliance capacity of the industry still far exceeds the actual market demand, and the excess pattern has not changed. Statistics from
China Cement Network show that by the end of 2025, 114 million tons of clinker production capacity will be supplemented, 175 million tons of clinker production capacity will be withdrawn, and 60 million tons of clinker production capacity will be reduced nominally, but compared with the total production capacity of more than 1.7 billion tons in the whole industry and the demand for 1.693 billion tons of cement, the total production capacity of the whole industry will be reduced. The effect of such reduction is very limited. Production
according to approved capacity can not fundamentally improve the supply-demand relationship of the industry, the core of which is that it only regulates the "production rhythm" of the supply side, but fails to solve the core contradiction of the imbalance between supply and demand-the mismatch between weak demand and excess supply. The realization of supply and demand balance depends on the precise matching of total supply and total demand, as well as the coordinated adaptation of supply structure and demand structure, while production according to approved capacity can only restrict the production scale of enterprises, which can neither stimulate demand growth nor optimize supply structure, and naturally it is difficult to change the imbalance between supply and demand.
From the demand side, the demand of cement industry has been declining in recent years, which has become the core drag of the imbalance between supply and demand.
In 2025, the national real estate development investment was 8278.8 billion yuan, down 17.2% from the previous year, and the new construction area was 587.7 million square meters, down 20.4% from the previous year. The downturn in the real estate industry directly led to a significant reduction in the demand for cement; at the same time, the investment in infrastructure in a narrow sense decreased by 1.5% year-on-year, the investment in core infrastructure areas such as highways decreased significantly, and the support of infrastructure for the demand for cement continued to weaken.
In this context, the national cement output is expected to drop to 1.69 billion tons in 2025, down 6.9% year-on-year. The continued weakness of the demand side makes the market still in a "supply exceeds demand" pattern even if the supply side shrinks production according to the approved capacity.
From the supply side, the current mismatch between supply and demand in the cement industry is reflected not only in the total excess, but also in the structural imbalance: the supply of high-end cement and special cement is insufficient, while the supply of general cement is seriously excessive; The imbalance between regional supply and demand is prominent, with oversupply in some areas where production capacity is concentrated, and occasional shortage of supply in remote areas or areas where key projects are concentrated. However, the policy of production according to the approved capacity is a "one-size-fits-all" norm, which does not take into account regional differences and product structure differences. For the excess capacity of ordinary cement, even if it is produced according to the approved capacity, it is still unable to digest the inventory; For the shortage of high-end cement, due to the limited approved production capacity, even if enterprises want to expand production, they are constrained, which eventually leads to "more excess, still shortage", and the imbalance between supply and demand is further aggravated.
In addition, there are many difficulties in the practice of the policy of production according to the approved capacity, which further weakens its effect on the regulation of capacity removal and supply-demand relationship.
On the one hand, the cement industry has a large number of enterprises, widely distributed in the region, some small and medium-sized enterprises are affected by capital, technology, regulatory costs and other factors, the motivation of illegal overproduction is still strong, it is difficult for the regulatory authorities to achieve all-round, dead-end supervision, and the effect of policy implementation is greatly reduced; On the other hand, the promotion of capacity replacement policy faces many obstacles. The Measures for the Implementation of Capacity Replacement in Cement and Glass Industry (2024 edition) has raised the requirement of replacement ratio, which has pushed up the replacement cost of enterprises. The replacement willingness of small and medium-sized enterprises is low, and some enterprises choose to withdraw voluntarily, but the withdrawal scale is limited, which can not form a large-scale capacity compression effect. More importantly, the cost of switching kilns in cement enterprises is low, even if the production capacity is strictly approved, enterprises can maintain operation by adjusting production rhythm and reducing operating rate, which can not achieve real capacity withdrawal, and the imbalance between supply and demand is still difficult to change.
Some people believe that production according to the approved capacity can standardize the competition order of the industry and avoid the price war caused by vicious overproduction, thus indirectly improving the supply-demand relationship.
But in fact, the root cause of price war is overcapacity and weak demand, not overproduction-even if all enterprises produce according to the approved capacity, excess capacity will still lead to enterprises competing for limited market share, and price war is still unavoidable. In order to truly reduce production capacity and improve the balance between supply and demand in
China's cement industry, the core is not to "force enterprises to produce according to the approved production capacity", but to jump out of the surface regulation and control and directly attack the root cause of the contradiction.
On the one hand, we should strengthen the control of total capacity, strictly control new capacity, speed up the elimination of backward and inefficient capacity, reduce the total excess capacity and optimize the capacity structure by means of capacity replacement, mergers and acquisitions, etc. Leading enterprises can improve capacity through internal capacity replacement and elimination of inefficient production lines. On the other hand, efforts should be made to stimulate demand growth, increase investment in infrastructure, accelerate the construction of new urbanization, promote the steady and healthy development of the real estate industry, promote the application of green cement and special cement, optimize the demand structure, and achieve the synergy of supply and demand. Production
according to approved capacity is only an auxiliary means to regulate the production order of the industry, which can not touch the core contradiction of excess capacity and imbalance between supply and demand in China's cement industry. It can not effectively reduce the total excess capacity, promote the withdrawal of backward capacity, nor stimulate demand growth, optimize the supply and demand structure, and has no substantive effect on the industry's capacity and supply and demand balance. In order to get rid of the predicament and achieve high-quality development,
China's cement industry must abandon the idea of "surface regulation" and focus on the reduction of total capacity, structural optimization and demand boosting, so as to truly solve the problem of imbalance between supply and demand and promote the industry to return to the benign development track.
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