The cement industry is going to have a fierce production capacity to cut 20% of clinker capacity.

Reducing the production capacity of clinker by 3.92.7 million tons, curbing new capacity, and consolidating the cement capacity of the top 10 large enterprises by more than 60%... Behind this series of data, the cement industry is determined to go to production capacity. On July 26th, the “Cement Industry Promotion of Capacity, Self-discipline, and Self-discipline and Efficiency Improvement Conference” was unprecedented. The leaders of the Ministry of Industry and Information Technology and the Cement Association and the top 50 cement companies in the country were present at the meeting, and they collaborated for the next three and a half years. In the time, the cement industry has completed the important proposition of “de-capacity”.
At the conference, Kong Xiangzhong, executive vice president of the Cement Association, read out the “Cement Industry De-Capacity Action Plan (2017-2020)” (discussion draft). According to the discussion paper, from now until 2020, the focus of the cement industry's de-capacity is to go to clinker capacity. At the same time, measures such as curbing new capacity, eliminating backward production capacity, and stopping production of 32.5 strength grade cement should go hand in hand.

Concentration of compression capacity increase “The new capacity building of all similar technologies must be stopped unconditionally!” Xiao Jiaxiang, executive vice president of the Cement Association, strongly appealed at the conference that his other identity is the president of Southern Cement.
Such an appeal is not a radical statement. According to the preliminary statistics of the Cement Association, as of the end of June 2017, there were 3,465 cement enterprises nationwide, including 46 clinker production enterprises, 1,234 cement production enterprises containing clinker, and 2,173 cement grinding station enterprises. 12 companies.
In terms of production capacity, the actual clinker production capacity in the country is 2.02 billion tons, and the cement production capacity is 3.83 billion tons. In 2016, the national clinker production was 1.376 billion tons, the clinker capacity utilization rate was 68%; the cement output was 2.403 billion tons, and the cement capacity utilization rate was 62.74%. The industry concentration of clinker and cement in the top ten cement companies in 2016 was 57% and 41%. Regardless of the capacity utilization rate or industrial concentration, both indicators are low, and the cement industry's de-capacity situation is urgent.
In this regard, the discussion draft puts forward four specific requirements for de-capacity: First, by 2020, the clinker production capacity will be reduced by 3.92.7 million tons (accounting for nearly 20% of the current clinker production capacity), and 530 cement grinding station enterprises will be closed (about The total utilization rate of clinker and cement in the country reached 80% and 70% respectively, achieving the goal of “capacity utilization reached a reasonable level”. Second, the concentration of clinker and cement production capacity of the top ten enterprise groups reached 70% and 60% respectively, and strived to achieve a concentration of clinker capacity of 65% in the top two enterprises in 10 provinces. The third is to set up special funds for de-capacity, and strive to set up cement investment management companies in 10 provinces and regions, and use special funds for de-capacity to form a market-oriented long-term mechanism for de-capacity. Finally, we must formulate and improve a number of cement industry standards, norms, guidelines and establishment of a system to comprehensively enhance the industry's ability to innovate and compete.
According to Xiao Jiaxiang, the current overcapacity of cement in some areas exceeds 50%, even if it is half a year after production suspension, it will not reach the balance of production and sales. There are still various projects on the grounds for new reasons, some of them are “approved small constructions”, and some are named after “technical reforms”, but they are newly built and expanded. He pointed out that the de-capacity of the cement industry must unconditionally stop the construction of new capacity of all similar technologies. At the same time, cross-regional capacity replacement should not be promoted, at least should not be replaced by equal replacement, but the reduction of replacement, otherwise the overall pattern and order of the industry will be disrupted. In addition, all cement and clinker production capacity should be fully verified, and publicized after verification. The problem production capacity should be clearly handled.

The situation in each region is slow and eager. Although the discussion draft generally outlines the approximate scale of cement de-capacity in the next three and a half years, the cement prices are also uneven due to the differences in cement prices in the six major regions of the country due to the cement sales radius. Qi, there are also huge differences in the de-capacity indicators carried by cement companies in various regions.
In the next three and a half years, clinker-removing tasks in Xinjiang, Inner Mongolia, Hebei, Shanxi, Sichuan, Yunnan, Liaoning, Henan, Guizhou, and Shaanxi will be heavily biased, especially in Xinjiang and Inner Mongolia, with a capacity of 38 million tons. To be eliminated. Secondly, Hebei and Shanxi provinces each have at least 36 million tons of capacity to be cleaned, while Shaanxi, which has a lighter task, has to eliminate 18 million tons of clinker capacity.
A person in charge of a large cement company in Xinjiang told the reporter that in the face of severe production capacity, Xinjiang has completely stopped production of 32.5 strength grade cement in early May. At present, the overall operation is normal and the effect is good. In the first half of the year, cement prices rose, but Xinjiang cement was increased by coal prices, and the cost per ton was also increased by 20 to 30 yuan. In the case of a demand increase of only 7%, cement companies realized a loss reduction of 16.8%.
In the second echelon, Shandong, Heilongjiang, Guangdong, Hunan and Hubei also received de-capacity indicators of 14 million tons, 11 million tons, 12.7 million tons, 10 million tons and 10 million tons respectively. The situation remains to be seen. Of course, there are also areas where indicators are not available. They are Beijing, Tianjin, Shanghai, Hainan, and Tibet.
A person in charge of a company in Fujian told reporters that his company has 32.5 strength cement still in production and sales, but the production capacity is less than 10%. According to the requirements of this capacity-removal plan, these production lines will soon be eliminated. At the same time as the production capacity is eliminated, it is necessary to exchange economic benefits. He further explained that if it is to reduce the elimination, the reduction of production capacity will inevitably lead to a decrease in supply, a relative increase in demand and an increase in prices. If it is equal elimination, for example, the company has eliminated two 2,500-ton production lines, and the total production capacity is 5,000 tons, but it can re-apply for a new 5,000-ton production line, because a 5,000-ton production line costs 2,500 tons. The production line costs are low and the economic benefits will be improved.
The Cement Association expects that cement demand in 2017 will be basically the same as last year, maintaining a total scale of 2.4 billion tons. From the price point of view, although the third quarter is in the callback period, the price in the fourth quarter will regain the price high in the second quarter. From a regional perspective, cement prices in the Yangtze River Delta are expected to stabilize in August, and prices in North China, Central South and Northwest China will also resume recovery in September. At the same time, environmental protection constraints and coal prices have a further upward trend, which will also drive up the price of cement in the later period. The annual industry profit is expected to reach more than 80 billion yuan.

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