In 2022, the Chinese cement industry experienced a cold winter: high costs, intensified supply and demand contradictions, continued market downturn, industry volume and price both fell, and cement production hit a new low in nearly 11 years, a year-on-year decrease of 10.8%; The industry's profits have severely evaporated, with a year-on-year decrease of about 60%.
       On the snow bank, the plum blossoms bloom, and in the spring mud, the grass grows. With the introduction of stimulus policies in infrastructure, real estate and other fields, the cement industry market pattern will enter a new stage in 2023. Faced with the severe situation, how should the cement industry respond to market changes, rebuild confidence, and continue to promote stable, healthy, and high-quality development of the industry? On March 15-16, China Cement Network held the "2023      China Cement Industry Summit", inviting industry leaders, experts, and others to jointly discuss the development direction of the cement industry, gather the power of spark, and promote high-quality development of the industry.
       Qiao Longde, former president of the China Building Materials Federation; Zhang Xuwu, Deputy Director of the Building Materials Department of the Raw Materials Industry Department of the Ministry of Industry and Information Technology; Zhang Liqun, Professor of Development Research Center of the State Council; Lu Yanchun, Director of the Price Monitoring Center of the National Development and Reform Commission; Zhang Jindong, Vice President of China Building Materials Corporation; Pan Zhonghong, General Manager Assistant of Anhui Conch Cement; Chen Zaigen, Chairman of Baowu Group Environmental Resources Technology; Gui Tongsheng, Secretary of the Party Committee and Chairman of Gezhouba Cement; Yang Hongbing, Vice President of Huaxin Cement; Li Wei, Vice President of China Resources Cement Holdings; Wang Aizhen, President of Henan Building Materials Industry Association; Kuang Hong, President of Shanghai Cement Association; Ding Jifeng, General Manager of Tianrui Cement; He Kunhuang, General Manager of Tabai Group; Lv Zhijian, President of Xinjiang Building Materials Industry Association; Li Yongjin, President of Ningxia Cement Association; Li Li, Executive Vice President of Guangdong Cement Association; Wang Xuejun, Vice President of Hubei Cement Industry Association; Shi Yantian, Secretary General of Heilongjiang Cement Association; Wang Jinxiang, Vice President of Shandong Shanshui Cement Group; Ma Weiping, former chairman of Yaobai Cement and senior consultant of China Cement Network; Zhuge Wenda, Chairman of Century Xinfeng Leishan Cement; Hou Jian, General Manager of Oriental Hope Chongqing Cement; Yu Jianping, Deputy Executive Director of Asia Cement Corporation; Xu Bin, General Manager of Helin Cement; Ma Jianjun, Deputy General Manager of Jidong Cement Marketing Management Center; Guo Zhanghua, General Manager of the Technology Center of Red Lion Holdings Group; Wang Rui, Secretary of the Party General Branch of Yaobai Special Cement Group Co., Ltd; Tao Zhiming, President of Shandong Quanxing Crystal Cement; Wang Zhaowen, General Manager of Liaoning Daying Cement Group; Zhang Zewen, President of Ningxia Yinghai Group; Li Xinyue, Chairman of Wanbei Cement, Fangcheng County; Wang Jianxin, Vice President of Washi Group and Secretary of the Party Committee of Washi Cement Group; Shao Jun, the founder and chairman of China Cement Network, and other leaders of cement enterprises, industry associations, technical experts, and equipment manufacturers attended the meeting.
       Demand pressure industries still face severe challenges
       Zhang Xuwu, Deputy Director of the Building Materials Department of the Raw Materials Industry Department of the Ministry of Industry and Information Technology, stated in his speech that in 2022, due to the combined impact of multiple outbreaks of the epidemic and weak downstream demand such as real estate infrastructure construction, the supply-demand contradiction in the cement industry has become prominent. At the same time, high coal prices have led to a significant increase in cement production costs, putting significant pressure on the operation of the cement industry throughout the year.
       In terms of production, the national cement production in 2022 was 2.13 billion tons, a year-on-year decrease of 10.5%. As of December 30, 2022, the national cement price index was 141.6 points, a decrease of 23.2% compared to the beginning of the year. In terms of efficiency, the cement industry achieved a profit of 68.6 billion yuan throughout the year, a year-on-year decrease of 59.5%.
       In 2022, the cement industry experienced its coldest year since 2016, with over a thousand loss making enterprises in the entire industry. The industry situation is very severe, "said Shao Jun, the founder and chairman of China Cement Network.
In 2023, the challenges in the cement industry remain. In terms of real estate, Yang Kewei, Deputy General Manager of E-House Kerui Information Group, believes that the current number of second-hand housing listings is on the rise, and people are not particularly optimistic about the prospects of real estate. The land market is still not recovering, and large-scale real estate enterprises, especially large-scale private enterprises, have not yet entered the land market.
In terms of real estate sales, it is expected that the sales volume this year will be optimistic and stop falling, and new construction will continue to decline by 20-25%. The real estate industry is still experiencing a weak recovery. Yang Kewei predicts that in the next decade, the incremental demand for housing in the real estate industry will still reach around 10 billion square meters. But in the next decade, the incremental scale of the real estate industry will decrease by about 30% compared to the past decade, and cement industry enterprises need to be prepared to reduce production.
       In terms of infrastructure, although China has introduced a large number of measures to stabilize growth in the context of stable economic growth, and infrastructure investment is expected to be fully utilized, funding issues will be a key factor restricting the implementation of infrastructure.
       Overall, the pressure on the demand side of the cement industry remains unabated in 2023. The industry generally expects that there will still be a slight contraction in cement demand throughout the year, resulting in significant pressure on the cement market.
       Qiao Longde, former president of the China Building Materials Federation, also pointed out at the industry summit that the current cement industry still faces many practical problems. Qiao Longde stated that the current industry is on the defensive and lacks innovation and adaptability. The price competition between enterprises around market share is excessive, and the overall perspective of industry coordination and industry interests is insufficient; Although technological equipment and production facilities are constantly improving, the price and efficiency of cement continue to decline, and the number of loss-making enterprises is increasing.
       He suggested that industry enterprises should create and form a new pattern of stable development under the current situation, adhere to the effective practices of industry coordination in the past few years, and innovate those that are outdated and not applicable.
       Enhancing Confidence and Seeking New Opportunities for Development Together
       Facing new challenges, seeking new opportunities, and planning new development. Against the backdrop of current overcapacity, intensified supply-demand conflicts, high costs, and continued market downturn, how can the cement industry seek breakthroughs in the changing situation and achieve high-quality development through breakthroughs?
       Qiao Longde stated that in the face of the current difficulties in the cement industry, enterprises need to have strong confidence, but confidence comes from themselves, from correct thinking, judgment, and response methods. Cement industry enterprises should grasp the overall trend of economic development and corresponding breakthrough points for their own development.
       Zhang Xuwu also believes that the more severe the situation we face, the more we need to strengthen development confidence, stabilize development expectations, maintain strategic determination, and strengthen confidence and determination.
We need to accelerate the pace of industrial restructuring, firmly resolve excess production capacity, strictly implement the policy of replacing cement production capacity, resolutely curb illegal new production capacity, ensure that total production capacity only decreases without increasing, accelerate the elimination of outdated production capacity, and revise and issue mandatory national standards for general Portland cement as soon as possible. By further improving the cement standard system of quality technology, environmental protection and energy consumption, backward production capacity will be forced to exit.
       We must also persistently carry out the normalized and staggered production of cement, strictly implement the notices of the Ministry of Industry and Information Technology and the Ministry of Ecology and Environment on further improving the normalized and staggered production of cement, promote the normalization of the production area and time of cement in the country, further consolidate the achievements of capacity reduction, and promote the green and low-carbon development and quality and efficiency improvement of the cement industry.
       In jointly promoting the healthy development of the cement industry, Lu Yanchun, Director of the Price Monitoring Center of the National Development and Reform Commission, also proposed three points: firstly, to enhance confidence and seek new opportunities for the development of the cement industry; Secondly, enhance overall awareness and maintain market and price stability; The third is to strengthen situation analysis and stabilize market expectations.