European and American countries have achieved high urbanization earlier than China, and their cement industry has also faced many challenges in the process of development, such as overcapacity, industry involution and downward demand. The successful experience accumulated by these representative countries in dealing with these problems deserves our study and reference.
1. Experience of the United States: raise emission standards and eliminate backward production capacity. 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. German experience: Obtain high industry profit margin with low capacity utilization rate. Since 2020, German cement consumption has continued to shrink due to the epidemic blockade, the energy crisis and the shrinking demand for housing. 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 13.5%, an increase of 3 percentage points over 2023.
3. Experience of Egypt: Compulsory quota reduces production, which promotes the recovery of cement price . 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), requiring enterprises to reduce production by at least 10% to alleviate the pressure of overcapacity. From 2021 to 2024, the price of cement continued to rise, and in 2024, the price of cement further rose to 3000 Egyptian pounds/ton (equivalent to 445 yuan/ton), an increase of 50% (Figure 1/Figure 2).
Figure 1 Trend of cement production and utilization rate in Egypt Figure 2 Trend
of cement price in Egypt Looking forward to 2026, cement enterprises will continue to supplement clinker production capacity in accordance with regulations, the total clinker production capacity will shrink, the market supply pattern will be reshaped, but the demand will continue to decline. Staggered production may be difficult to sustain, and the cement industry will eventually return to the law of the jungle. How to establish a new consensus and restore the healthy ecology of the industry in the game of the stock market is the key to meet the current challenges.
To this end, China Cement Network will hold the 15th China Cement Industry Summit and TOP100 Award Ceremony in Hangzhou on April 9-10. At the same time, the " Cement Economy Fifty People Forum (C50) " was held. The Summit will build a platform for the docking of supply and demand and the collision of ideas, explore the path of green transformation and intelligent upgrading from the dimensions of macroeconomic insight, industrial chain synergy and technological innovation breakthroughs, plan a layout for the "15th Five-Year Plan" green development of the industry, and work together to create a new chapter of high-quality development!
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