production capacity is less than 50%, the overall profit of the industry has fallen off a cliff from the historical high of 186.7 billion yuan in 2019, and the cement output in 2025 is only 1.693 billion tons, a 15-year low. When this string of figures is thrown out, no one will say that the cement industry is having a good time.
However, what is more worrying than these figures is the situation of the "mezzanine enterprises" in the industry: the scale is not big enough to make mergers and acquisitions; the assets are not bad enough to close down, but they are not willing to withdraw voluntarily. You are in a dilemma if you don't depend on each other. Such enterprises are estimated to account for a considerable proportion of the total number of enterprises in the industry, and their fate is one of the key variables for whether the current cement industry can really be cleared.
Why don't they merge or exit?
Logic is not complicated. Mergers and acquisitions need capital, and most small and medium-sized cement enterprises have already been hit by the industry downturn for three or four years, cash flow is tight, and even some enterprises have been struggling on the loss line. In 2024, the overall profit of the industry was less than 16 billion yuan, and most enterprises were actually in a loss. No money on hand, how to talk about mergers and acquisitions?
What about quitting? There are several layers of resistance. One is how to dispose of assets -- production lines, mines, land -- all of which are invested with real money. When the market is not good, it is not easy to find a suitable buyer, let alone sell at a good price. The other is the burden of personnel placement -- once the factory is closed, what will the employees do? The pressure from the local government will follow; 3 It is boss of a lot of medium and small businesses still has a breath in the heart: get through is victory, in case the market warms up?
This tone is human nature, but in the current industry structure, it is likely to be a dangerous illusion. How long is the way to
"endure"? The
answer is likely to be shorter than many expect, and this is not a cyclical trough, but a structural turning point. The two engines
supporting cement demand – real estate and infrastructure construction – have stalled simultaneously, and there is no sign of rekindling in the short term. Investment in real estate development continues to shrink, and the area of new construction has been declining for many years, which is not a panting adjustment of the market, but a systematic shrinkage of the industry. Although infrastructure is still a tool for steady growth, the era of large-scale "iron bus" has passed, and the marginal pulling effect is getting weaker and weaker. In 2025, the cement output will fall to 1.693 billion tons, a 15-year low, and most institutions predict that this figure will continue to decline in the next few years-in the medium term, the output may fall to 1.3-1.4 billion tons; in the long term, it may even fall back to about 700 million tons.
This means that even if there is no policy pressure, demand itself is draining the foundation for SMEs to survive. The logic of the industry in the past was "volume falls, price stabilizes, price supplements", but now the overcapacity is so severe that the price can not hold up at all, and the premise of "waiting for the market to recover" does not exist at all.
More importantly, this round of downward demand is not simply the result of the economic cycle, but the result of multiple structural factors such as population structure, urbanization rate and long-term de-inventory of real estate. In other words, it is not spring that comes, but a new and lower platform. For small and medium-sized enterprises, the opposite of "endure" is not a turning point, but a deeper quagmire.
The so-called "three ways out" actually point to the same direction
. Industry analysis has drawn three ways for such enterprises: asset package sale, transfer of capacity indicators, and striving for policy compensation. There are different ways to say it, but it is essentially the same thing- to withdraw voluntarily, the sooner the more active. In the context of the
current downward demand, small-scale production capacity in the region is accelerating depreciation. Those who exit early still have the residual value of mines, land, and productivity indicators in their hands; those who exit late will have a worse market, fewer buyers, and lower consideration; and those who are forced to liquidate in the end may only be left with debts and a pile of scrap metal.
Have a kind of idea is: wait for bibcock enterprise to come buy. However, mergers and acquisitions require people to be willing to take over, and leading enterprises choose the quality of assets-good mine endowment, strong location advantages, low production costs. Small and medium-sized enterprises caught in the middle, these are often not prominent, the probability of being picked is not high; the more delayed, the worse their financial situation, the lower the valuation, the less bargaining chips.
There is also the idea that if we wait, maybe the market will bottom out. The problem is that this time the bottom can not be pulled up by a policy turning point-the population structure is changing, the urbanization rate is becoming saturated, and the real estate is destocking, which determines that demand will not return to the past. Is there really a fourth way for a
few enterprises?
Yes, but we also have to face the barrier of shrinking demand. Small and medium-sized enterprises, which
occupy a special geographical location and form a natural transport barrier, may still have a place in the local small engineering market-the logistics cost of large foreign enterprises is high, and the local supply and demand can be basically balanced. But the premise of this logic is that the local market itself has enough volume and can be sustained.
With the agglomeration of population to big cities and the contraction of county economy, small projects in many places are also shrinking. Even without the pressure of environmental protection and carbon emissions, the continued decline in local demand alone is enough to make such enterprises gradually lose their survival support. Asset-light operation can delay consumption, but if regional demand continues to shrink, the end point will not change, just arrive later.
"Support" does not mean that there is a way out
in the cold winter of the industry, "support" is an instinct, but "support" does not mean that there is a way out. The structural shrinkage of cement market demand can not be explained by a certain policy or a certain cost, but by the fundamental change of the growth logic of the whole industry. Enterprises
caught in the middle are not facing the choice question of "whether to quit or not", but the blank filling question of "when to quit"-and this blank filling question is getting smaller and smaller, and the time is getting tighter and tighter.
While there are still chips in hand, actively assessing the way out and actively docking the integration side are the ways to grasp the fate in their own hands. Wait for demand to shrink again, wait for regional prices to rot again, wait until you can't even negotiate decent assets, then it's too late to say anything. The
situation is no one's fault, but how to deal with it is our own business.
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