in 2022, the contradiction between supply and demand has gradually enlarged, the benefits have continued to shrink, and the development of the industry has encountered unprecedented challenges. In this grim situation, the cement industry to achieve steady growth is a necessary prerequisite for high-quality development. Recently, the Ministry of Industry and Information Technology issued the Work Program for Steady Growth of Building Materials Industry (2025-2026) (hereinafter referred to as the "Program"), which put forward the steady growth goal of "2025-2026, the recovery of building materials industry and the effective improvement of profitability", and gave a series of important measures such as strict capacity control. The author believes that in order to achieve the goal of steady growth, the cement industry has become the top priority on the basis of strictly prohibiting new cement clinker production capacity!
According to the statement of the National Bureau of Statistics, the new production capacity refers to the design capacity increased through fixed assets investment activities, and the new projects refer to the projects built from scratch. According to this statement, the new cement clinker production capacity can be understood as the cement clinker production capacity that has not been replaced or replaced (including reconstruction and expansion) but has generated new production capacity. The new production capacity refers to the project capacity that has been built from scratch. During the "Eleventh Five-Year Plan" period, with the continuous improvement of China's urbanization rate and the rapid development of infrastructure, the demand for cement is increasing year by year, and the industry efficiency is rapidly improving, which makes a large number of disorderly influx of capital, and the contradiction of surplus is gradually highlighted. In September 2009, the State Council issued Several Opinions on Restraining Overcapacity and Redundant Construction in Some Industries and Guiding the Healthy Development of Industries, which put forward the principle of "strictly controlling new cement production capacity and implementing the principle of eliminating backward production capacity in equal quantities" to strictly control new production capacity. In October 2013, the Guiding Opinions of the State Council on Resolving the Serious Contradiction of Overcapacity (No.41) was issued, which for the first time put forward the idea of "strictly prohibiting the construction of new capacity projects". In the first half of 2016, when the efficiency of the industry was low, the State Council issued the Guiding Opinions of the General Office of the State Council on Promoting the Steady Growth of the Building Materials Industry, Adjusting the Structure and Increasing the Efficiency, which explicitly required that new capacity be strictly prohibited. Subsequently, the Measures for the Implementation of Capacity Replacement in Cement and Glass Industry (2021 and 2024 revised) were promulgated one after another, continuing the policy of strictly prohibiting new capacity. In September 2025, the Work Plan for Steady Growth of Building Materials Industry (2025-2026) emphasized once again that new production capacity of cement clinker and flat glass is strictly prohibited, and capacity replacement plan must be formulated for new construction and reconstruction projects.
Table 1: Policy evolution
of controlling and strictly prohibiting new capacity Source: Cement Big Data (https://data.ccement.com/)
From the perspective of effectiveness, after the first mention of "strictly prohibiting the construction of new capacity projects" in Document 41, the growth momentum of capacity has been effectively curbed. And there is a downward trend. Although the design capacity of clinker is still increasing from 2013 to 2016, many of the construction projects approved before are put into operation, and the design capacity of clinker is decreasing year by year after 2017. From the point of view of shortcomings, on the one hand, because the policy has not been well implemented, local protection, illegal examination and approval, approval of small and large violations occur frequently; On the other hand, enterprises expand in the name of capacity replacement and technological transformation, and there is no new capacity on the surface, or even a reduction, but the actual capacity has greatly increased, and the phenomenon of overproduction is serious, which seriously violates the original intention of the policy of strictly prohibiting new capacity. It is estimated that the current real capacity is about 2.2 billion tons, and the partial surplus has gradually evolved into a comprehensive surplus situation.
Figure 1: Trend
of clinker production capacity in recent 25 years Data source: Cement Big Data (https://data.ccement.com/)
Forbidden to add new cement clinker production capacity needs to be further refined: Forbidden to cross provinces, At present, all provinces have the problem of overcapacity in cross-city replacement
, and allowing cross-province replacement may further aggravate the problem of overcapacity in some regions. At present and for quite a long time, the main project of capacity replacement in the industry is to supplement capacity, with less new construction. According to the statistics of Cement Big Data Research Institute of China Cement Network, up to now, among the 105 projects that have been publicized to supplement production capacity, there are 27 cases of trans-provincial replacement, accounting for about 26%; among the 78 non-trans-provincial replacement projects, there are 28 cases of trans-city projects, accounting for about 36%. Among them, the new clinker production capacity in Heilongjiang, Anhui and Hubei is between 1.5 and 2 million tons, which will inevitably lead to more difficulties in the operation of the provincial (city) or surrounding markets. The author suggests that under the background of overall surplus, the prohibition of new cement clinker production capacity needs to be further refined, and that cross-provincial replacement should be strictly prohibited, while the replacement between prefecture-level cities in the province should be prohibited.
Table 2: Increase
of designed clinker production capacity in some provinces Data source: Cement big data (https://data.ccement.com/)
Optimize stock production capacity: Increase self-elimination efforts
2500t/d The production capacity of and below production lines accounts for about 20%, with a considerable proportion. These production lines are relatively backward in energy consumption, emission and environmental protection indicators. At present, only a few provinces have issued relevant elimination plans, and most provinces have not issued relevant policies and plans. Among them, Shandong is in the forefront, and the production lines of 2500t/d and below have been basically cleaned up. The author suggests that provinces that have not yet issued relevant policies should show their determination to break their wrists and formulate plans for eliminating and withdrawing production capacity of 2500t/d and below production lines as soon as possible in light of the actual situation in the region.
Table 3: Policy Information
on Eliminating Production Lines of 2500t/d or Less in Some Provinces Source: Cement Big Data (https://data.ccement.com/)
In addition, We can also increase the intensity of elimination by raising the intensity of carbon emissions per unit, the level of energy consumption, the substitution rate of raw materials and fuels, and the emission of pollutants. Taking fuel substitution as an example, it is estimated that when TSR increases by 1 percentage point, carbon emissions per ton of clinker will decrease by 1.5 ~ 2.2 kg, and energy consumption will decrease by 0.6 ~ 0.9 kg of standard coal. Alternative fuels play a greater role in energy saving and carbon reduction, but there is a big gap between China and developed countries in fuel substitution rate. The author suggests that we should raise the threshold standard of elimination, speed up the withdrawal of inefficient production capacity, optimize the stock capacity, and actively lose weight and keep fit.
Figure 2: China has a low
level of calorific value substitution rate Source: Cement Big Data (https://data.ccement.com/)
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