Abstract: Since the beginning of this century, the rapid urbanization has brought about a continuous increase in cement demand, and China's cement industry has made considerable progress in organizational optimization, technological progress and product upgrading. However, due to the entry of a large amount of capital at the beginning of the century and the rapid expansion of production capacity, the serious contradiction of excess capacity has been a particularly difficult dilemma for the cement industry since 2007, and has not been fundamentally alleviated. Especially in 2022, the platform with cement sales falling below 2.3 billion tons began to enter the downward channel, with an annual decline of 100-200 million tons, to 1.8 billion tons in 2024. Due to vicious competition, the industry is involuted. In fact, in the past 25 years, the cement industry has made great achievements in "anti-involution" and created a healthy ecology of the industry. In this paper, from the past history of the development of the industry to solve the contradiction of excess cement production capacity and improve the vicious competition, as well as from the effective measures taken by the foreign cement industry to cope with the downturn period, we try to sum up some methods of "removing production capacity and reducing production", hoping to rely on the government and the effective market, through "national guidance, association supervision and enterprise self-discipline". To provide ideas for creating a new development pattern of cement industry. Key words: cement overcapacity, capacity reduction, anti-involution, new development pattern Background: China's cement industry has a history of nearly 140 years, and the modern new dry process "two grinding and one burning" production process is becoming more and more mature, except for a small amount of special cement. The market share of general Portland cement is high (more than 97%) and the product homogeneity is high. Cement is also a resource-dependent and energy-dependent product, and limestone, the main raw material, is a non-renewable resource. Limited by logistics cost and shelf life (3 months), its sales radius is within 200 kilometers of automobile transportation, 500-800 kilometers of railway transportation and 1000 kilometers of water transportation, and automobile transportation is the main mode. Therefore, cement is bound to be a regional "short leg" product. Since the beginning of this century, with the rise of the real estate market and the construction of a large number of national projects, China's cement output has increased from 600 million tons in 2000 to 21 tons in 2022 after more than 20 years of development, while the production capacity has also leaped from 700 million tons to 3.6 billion tons in 2022, and the surplus rate has risen from 14% to 42%. In 2022, the demand for cement began to decline, and the contradiction of excess capacity became more and more serious, with the excess rate reaching 48% in 2024. In the past three years, the industry's internal volume has been extremely serious, vicious competition has intensified, and industry profits have fallen from a high of 180 billion yuan in 2019 to 26 billion yuan in 2024, a decline of 85%. What is more worrying is that in August 2025, One, The general situation of the development of the cement industry since the beginning of this century and the current situation of the serious overcapacity and the intensification of the internal volume 1. The preparation of raw materials is that the raw materials (limestone, clay or shale, iron ore, etc.) Are blasted or mechanically mined, crushed by a crusher, stacked in layers, and sent to a raw mill (vertical mill or ball mill) for grinding into raw materials; Clinker calcination is to send the homogenized raw material into the cyclone preheater for preheating and decomposition, and then enter the rotary kiln for high temperature calcination to generate clinker containing minerals. The clinker falls into the cooler from the kiln tail for cooling and then enters the clinker warehouse for storage; Cement is produced by grinding clinker, gypsum and mixed materials (such as slag and fly ash) in a certain proportion by cement mill (vertical mill or ball mill) to form finished cement products, which are stored in cement silos and enter the consumer market in bulk and bags. Usually, the production process is also referred to as "two grinding and one burning". According to the different equipment specifications, one ton of clinker can produce 1.3-1.2 . In 2000, China's cement enterprises were small in scale, large in quantity, scattered in distribution and low in concentration, and CR10 was only 12%. With the continuous improvement of cement demand and industry efficiency, leading cement enterprises such as Conch, Shanshui and Huaxin began to expand across regions. In 2007, China's building materials began a large-scale joint reorganization of cement enterprises in the southeast, central south, southwest and northern regions, and in 2016, Jinyu Group acquired Jidong Cement. By the end of 2021, China's building materials restructuring " first basically eliminated shaft kilns and reduced the amount to replace them with large-scale clinker production lines. From 2000 to 2024, small-scale production lines will be gradually withdrawn, and the proportion of 5000t/d and above production lines will be increased from 8% to 64%; 3. At the same time, innovative research and development of energy-saving and carbon-reducing equipment, implementation of alternative technologies for raw materials and fuels, and promotion of green upgrading of processes will be carried out. From 2000 to 2024, the domestic energy consumption per ton of clinker decreased steadily from 146kgce/t to 105kgce/t; The carbon emission intensity per ton of cement decreased from 735 kg CO2 /t to 632 kg CO2 /t. However, due to the low fuel substitution rate and other reasons, there is still a gap between China's carbon emission intensity and the international advanced enterprises. The carbon emission intensity per ton of cement of Holcim and Heidelberg in 2024 will be 538 kgCO2 /t and 527 kgCO2 /t respectively. Figure 1 Trend and comparison of emission and energy consumption of the industry 4. Cement grade refers to the strength grade of cement, which is one of the important indicators to measure the quality of cement. The higher the cement grade is, the higher the compressive strength and flexural strength are. The improvement of cement strength helps to meet the higher requirements of modern construction engineering for material performance, thus improving the overall quality and safety of the project to a certain extent (see Table 1). In 2005, backward shaft kilns and small dry hollow kilns accounted for about 55% of cement production, and 32.5 grade cement and below products accounted for about 85% of the total output. 42. The quality of low-standard cement products in shaft kilns is unstable, which is easy to cause hidden dangers of engineering quality. In 2007, GB 175-2007 "General Portland Cement" was issued and revised twice in 2014/2018. Since then, P. O 32.5, P. O 32.5R, P. C 32.5 and P. C 32.5 low-grade cement have been steadily withdrawn, the proportion of high-grade cement has been continuously increased, the quality of products has been significantly improved, and the service life has been effectively extended. By the end of 2024, the proportion of cement production of grade 32.5 and below has dropped to 25%. 42. (Figure 2/Figure 3 ) Table 1 List of Compressive Strength and Flexural Strength of Different Grades of General Portland Cement (Version 2023) Figure 2 Proportion of Cement Output of Different Grades in China in 2005 Figure 3 In 2024, the output of different grades of cement in China accounted for 5. Before 2022, the cement industry was in a period of rapid expansion and a period of peace, and the rise and fall of the price trend was basically consistent with that of the world (see Figure 4). However, after 2022, China's cement industry entered a downward period (the investment bank optimistically predicted that the cement sales volume in 2030 would be about 1.2 billion tons in 2022), and faced with the aggravation of the serious contradiction of excess capacity, especially in 2024, when the excess capacity was nearly half, the vicious competition of cement became more and more intense, and the profit margin of the industry fell to the lowest level since this century in 2024 (Figure 5). The price of cement is less than 1/3 of that in Europe and America, and only 1/10 of that in Greenland. At present, the cement industry has reached the most dangerous time, and it is urgent for the cement industry to "reverse involution", resolve the serious contradiction of excess capacity, get out of the price depression and restore the reasonable profits of the industry. Figure 4 China/EU/US Cement Price Comparison Figure 5 Overcapacity and Profit Margin Trend of China's Cement Industry II. Achievements of Domestic Cement Industry in Solving the Dilemma of Serious Overcapacity Since the Beginning of this Century From 2000 to 2010, China's economy grew rapidly. The urbanization rate increased from 36.22% to 49.95%, the cement output increased rapidly from 600 million tons to 1.88 billion tons, and the industry benefit increased sharply from 633 million yuan to 712. In 2000, the national cement production capacity was only 718 million tons, and in 2010, it expanded to 2.793 billion tons. In fact, since 2006-2007, the cement industry has been unremittingly solving the problem of serious overcapacity and striving to explore the way of supply-side structural reform. The government has issued a series of policies, industry associations have actively offered suggestions and suggestions, enterprises under the leadership of large enterprises have strengthened self-discipline, and have successfully explored the successful experience of supply-side structural reform. 1. In the first stage (around 2000-2010), the state issued a series of policies to eliminate backward production equipment such as shaft kilns, hollow kilns and wet kilns, as well as cement mills with a diameter of less than 3.0 meters; In the second stage (from 2016 to now), the implementation measures of capacity replacement in cement and glass industry were promulgated in 2018, and two revisions were made in 2021/2024. It is stipulated that the replacement ratio of key areas and non-key areas for air pollution prevention and control should be adjusted from no less than 2:1 and 1.25: 1 to no less than 2:1 and 1, respectively. A total of 10 cement production capacity will be eliminated in 2000-2024, and low-efficiency clinker production capacity of 2000t/d and below will be eliminated. 1. 562 clinker production lines will be shut down in 2015-2024, involving 320 million tons of production capacity. Figure 6 Withdrawal of backward cement production capacity Figure 7 Shutdown of clinker production capacity from 2015 to 2024 2. The 11th Five-Year Plan first proposed the control target of energy consumption intensity. Energy consumption per unit of GDP is required to be reduced by 20% compared with 2005, and 2010 is the last year of assessment. In May 2010, the State Council issued the Notice on Further Intensifying Efforts to Ensure the Realization of Energy Conservation and Emission Reduction Targets in the Eleventh Five-Year Plan, requiring all provinces to complete the task of energy conservation and emission reduction, and to hold accountable those areas that have not completed the task. After May, power cuts will be gradually implemented nationwide. From 2010 to 2011, 24 provinces took power rationing measures in different periods. East China was more serious, and Zhejiang Province had the greatest pressure on power consumption. During the period of power rationing, the industrial added value decreased year on year. 3. The average price of cement in East China was 290 yuan/ton in June 2010 (the capacity utilization rate was 73%; Cement output 55 million tons), rose to 350 yuan/ton in September (capacity utilization rate 69%); Cement output is 52 million tons, 3 million tons less than June), while the peak demand season in the fourth quarter and the rise in coal prices further push the cement price up to 500 yuan/ton at the end of the year (capacity utilization rate of 73%, cement output of 55.5 million tons), the national cement price increase is larger, directly pushing up the price at the beginning of 2011, superimposing demand growth factors. Sales exceeded 2 billion tons. In 2011, the profits of the industry increased greatly, breaking through the 100 billion yuan mark for the first time. 2) Peak-shifting production from 2016 to 2021: from north to south, from trial of peak-shifting production in heating season to regular promotion. From 2014 to 2015, off-peak production was tried out in some northern provinces. In May 2016, the Guiding Opinions of the General Office of the State Council on Promoting the Steady Growth of Building Materials Industry, Adjusting Structure and Increasing Benefits put forward the implementation of peak staggering production. In October of the same year, the Ministry of Industry and Information Technology and the Ministry of Environmental Protection issued the Notice on Further Improving Cement Peak-Staggering Production, requiring all production lines in 15 northern provinces and cities to stagger the heating season. In December 2020, the Ministry of Industry and Information Technology and the Ministry of Ecology and Environment jointly issued the Notice on Further Improving the Normalized Peak-Staggered Production of Cement to promote the normalization of the area and time of peak-staggered production of cement in China. During this period, the output of cement in the fourth quarter of the northern region decreased from 197 million tons in 2016 to 1.2017-2021 in 2021 , and the southern region also implemented peak staggering production one after another, and the Spring Festival, rainy season, high temperature and hot summer season were nationalized and normalized to promote peak staggering production restriction. It has achieved the "golden five years" of the cement industry from 2017 to 2021. 3) Power cuts in 2021: cement prices rose to a historical high. In the second half of 2021, due to the impact of coal shortage and price inversion, the rigid implementation of the policy of "double control of energy consumption" and extreme weather, the contradiction between power supply and demand broke out in a concentrated way, many provinces pulled the brake to limit power, coupled with the adoption of "campaign production restriction" in high energy-consuming industries, the production and supply of many industrial products were greatly restricted. In September 2021, the output of cement was 200 million tons. Down from August by 4. 1. In 1970, the Clean Air Act was passed. The Act established "overarching standards" for six pollutants (SO SO, PM, NO, NO, CO, O, Pb), requiring States to ensure air quality meets NAAQS by 1975 to protect public health and welfare. It was amended twice in 1977/1990 to introduce market mechanisms (such as emissions trading) to reduce emissions of sulphur dioxide (SO ²) and nitrogen oxides (NO NO). From 1970 to 2000, a total of 27 million tons of cement production capacity were eliminated. From 2001 to 2010, 18 million tons of production capacity were eliminated due to the impact of environmental protection and financial crisis. 2. Since 2020, cement consumption in Germany has continued to shrink due to the epidemic blockade, energy crisis and shrinking housing demand. Due to the high concentration of cement production capacity (CR5 up to 76%), enterprises have a good understanding of reducing production and guaranteeing prices. By actively reducing the operating rate, cement production continued to decline, breaking 30 million tons to 28 million tons in 2023, further dropping to 26.63 million tons in 2024, and the utilization rate of cement production capacity dropped to 57% in 2024. Even so, German cement companies still have higher profit margins. In 2024, Heidelberg achieved a sales profit margin of 13.3 . In order to alleviate the pressure of overcapacity, in July 2021, the Egyptian Competition Authority (ECA) introduced measures to restrict cement production (compulsory quota system for cement enterprises). Enterprises are required to cut production by at least 10% to alleviate the pressure of overcapacity. From 2021 to 2024, the cement price continued to rise, and in 2024, the cement price further rose to 3000 Egyptian pounds/ton (equivalent to 445 yuan/ton), an increase of 50% (Figure 8/Figure 9). Suggestion 1: resolutely eliminate clinker production lines of 2500t/d and below; 3. Reason 1: implement environmental protection requirements. In January 2024, the Ministry of Ecology and Environment and other five departments jointly issued the Opinions on Promoting the Implementation of Ultra-low Emission in Cement Industry, which requires that the hourly average emission concentrations of waste particulate matter, sulfur dioxide and nitrogen oxides should not be higher than 10 mg/m ³, 35 mg/m ³ and 50 mg/m ³, respectively. By the end of 2025, we will strive to complete 50% of the transformation and complete the transformation in 2028. The production line of 2500t/d and below can not meet the needs of the construction of beautiful China (Table 4). 
Reason 3: The national clinker production capacity of 2500t/d and below accounts for 18.43%. 3.
Suggestion 2: Resolutely reduce the replacement, increase the replacement ratio of general cement clinker withdrawal capacity and construction capacity to 2:1, and implement total amount control in each province. It is strictly forbidden to replace production capacity across provinces and prevent the revival of zombie production capacity. The first
reason is to promote Zhejiang experience. In May 2023, the Office of Industry and Information Technology of Zhejiang Province issued the Action Plan for High-quality Development and Carbon Peak of Cement Industry in Zhejiang Province (2022-2025) (hereinafter referred to as the Plan). The Plan requires that the replacement ratio of general cement clinker withdrawal capacity and construction capacity should be from 1. Through the joint efforts of provinces, cities and counties, the integration and capacity replacement of 2500 t/d and below cement clinker production lines in the whole province should be promoted annually, and by the end of 2025, the total output of cement should be controlled in 1. The average price of cement in Zhejiang is 20-50 yuan/ton higher than that in Shanghai, Anhui, Jiangsu and other surrounding markets. By the end of 2024, clinker production capacity has decreased by nearly 25 million tons compared with the high level in 2009. The second
reason is to strictly implement the 2024 version of capacity replacement method, implement 2:1 replacement, and put an end to cross-provincial replacement to activate zombie capacity. Zombie production capacity in the cement industry generally refers to those cement or clinker production lines that have been shut down for a long time but have not been completely eliminated. These production lines may be shut down due to backward technology, substandard environmental protection or poor economic benefits. Through capacity replacement, the cement industry has activated some zombie production capacity since 2018. For example, in July 2025, Heilongjiang Province announced a plan to supplement the production capacity of a 5000t/d cement clinker project. The 2000t/d clinker production line used for replacement in the project has been shut down in November 2022, and has been shut down for more than two years by the time the plan was released.
Suggestion 3: Learn from Egypt's experience and reduce the number of production and operation days to 250 days. In October
2024, the Ministry of Industry and Information Technology issued the Notice on Further Standardizing the Capacity Management of Cement Industry (hereinafter referred to as the Notice). The Notice requires that the actual daily output of the production line shall not exceed 110% of the daily production capacity of the record, and the actual annual output shall not exceed the annual production capacity of the record (annual production capacity = daily production capacity of the record × production days). The annual production days are calculated as 300 days. By December 31, 2025, a capacity replacement plan will be formulated for excess capacity in accordance with the current policy, which will be valid until 2027. Up to now, there are more than 75 cases of capacity replenishment, with a cumulative capacity reduction of about 17 million tons. However, there are also some areas that are wait-and-see, lack of supervision in implementation, and illegal operations (such as secondary sales of production capacity indicators). In view of the serious overcapacity and the number of working days throughout the year, it is suggested to further reduce the annual production days of the clinker kiln to 250 days. The fourth
suggestion is to establish an orderly power supply mechanism for power cuts and power cuts, so as to give power to the people.
In view of the fact that there is a serious gap in residential electricity consumption during the winter heating season in the north and the summer high temperature season in the south, in line with the principle of giving electricity to the people, the relevant ministries and commissions of the state have introduced an orderly power supply scheme from north to south during the peak period of electricity consumption, and clearly stipulated the duration of annual irregular power outage. According to the requirements of the state and the actual situation, the provinces formulate and implement the annual orderly power supply action plan for cement enterprises. The fifth
suggestion is to improve the off-peak production mechanism, control the storage location according to the market demand, and arrange the production reasonably. Starting
from the total domestic demand for cement, the state has formulated guiding standards for capacity utilization rate (such as no more than 60%), controlled storage locations, and eliminated blind overproduction and waste of resources. According to the requirements of the state and the actual supply and demand in the province, the provincial industry management departments formulate and promote the implementation of the annual peak staggering and production restriction plan and quarterly and monthly actions, and establish a reward and punishment mechanism. The
sixth suggestion is to introduce a tax rebate policy to guide the export of cement and restrict imports.
In the past three years, China's cement products have maintained a sustained growth trend (Figure 11). It is suggested that the national level should introduce more policies to encourage the export of cement and other building materials products, increase support for export to overseas markets, and restrict imports.
Secondly, the association supervises , and the association cooperates with the government functional management departments to carry out regular inspection, supervision and rewards and punishments. Industry associations are the communication bridge between the government and enterprises, and they are duty-bound to cooperate with the government to promote the landing of policies. Firstly, the association cooperates with the government functional management departments to supervise the landing of policies, regularly and irregularly inspects and puts forward suggestions on rewards and punishments. The "red, yellow and blue" system shall be implemented. Enterprises with serious violations shall be given a red card (one month of suspension for rectification); enterprises with general violations shall be given a yellow card (15 days of suspension for rectification). Secondly, from the perspective of ensuring product quality and maintaining the image of the industry, the association calculates the lowest cost of the region every month, and introduces the lowest guidance price system to prevent the vicious competition of selling below the cost price. Organize local associations and enterprises to actively arrange the cost of regional cement enterprises, and do a good job of data sorting. Thirdly, cooperate with government functional management departments to carry out comprehensive enterprise rating, set up benchmarks and play a demonstration effect. Enterprises are rated according to ESG standards and policy implementation, and are regularly publicized to the public.
Thirdly, enterprises should exercise self-discipline , advocate advanced industry culture, form industry consensus and build a healthy industry ecology. First, further improve industry concentration. Second, give full play to the leading role of large enterprises and set up industry benchmarks. Third, reshape the industry culture that "the interests of the industry are greater than interests of the enterprise, and the interests of the enterprise are bred in the industry". Fourthly, we should adhere to the principle of "eliminating backwardness, reducing and upgrading, orderly use of electricity, staggering peak and limiting production" to form an industry consensus.
Conclusion: The cement industry plays an important role in the process of economic development, but the intensification of "involution" vicious competition has also brought great disaster to the industry. It is hoped that the suggestions in this paper will provide some useful ideas for the cement industry to get rid of the predicament of serious overcapacity and create a new development pattern. Of course, the implementation of the policy is not achieved overnight, which requires broad consensus and coordinated action both inside and outside the industry. It is believed that with the joint efforts of national guidance, association supervision and enterprise self-discipline, the cement industry is expected to rely on the efforts of the government, associations and enterprises to improve quality and reduce production capacity, effectively reduce production, and obtain reasonable industry profits with scientific capacity utilization rate in the future downward period, so as to promote the further high-end, intelligent and green upgrading of cement technology and high-quality development of the industry. It is believed that cement workers will also work hard to respond to the government's call, take a solid step on the road of "anti-involution" with an open mind and innovative thinking, and contribute their due strength to the stable development of the economy and society.
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