China Cement Industry Overview, 2011-2020


Chinese cement industry enters the golden period of rapid development after the reform and opening-up. The annual output volume of cement increased from 150 million tons in 1985 to 2, 359 million tons in 2015, of which the total output volume ranked the first in the world. The annual average consumption of cement per capita increased from less than 140 kilograms to about 1.7 tons during the same period.

In terms of products consumption structure, cement is mainly used in infrastructure building of houses and roads. The absolute gross output value of China construction industry increased during  2011 to 2015 while the growth rate was experiencing an overall declining trend. The construction industry increased by 2.29% YOY in 2015 compared to 2014 by gross output value, tumbling through the growth rate of over 10%. The demand for cement will be reduced by the declined market of China real estate and the decreased new-built real estate projects. The output volume of cement was 2,307.8610 million tons in 2015, decreased by 5.68% YOY.

The barriers to entry of cement industry are relatively high in China. It has product features of relying on energy, high transport cost and limited sales radius, which determine its characteristics of being highly fragmented and numerous in enterprises of China cement industry. According to CRI research, the total quantity of China cement manufacturers was over 3, 000 up to the end of 2015, of which the total sales volume of top 5 enterprises accounted for approximately 28.8% with an intense market competition.

The growth rate of China GDP remained a leading position in the world from 2011 to 2015, but the overall growth rate experienced a significant declining trend. With the deepening of economic structural adjustment in China, it is estimated that the economic growth rate will gradually slow down, but will remain that of over 6% during 2016 to 2020.

It is predicted that China cement industry will be confronted with better development trend in the next few years. The “Three-Year Action Plan” was developed by Chinese government on Jun. 17, 2015 to reconstruct 18 million shanty towns including dangerous buildings and villages in urban areas and 10.6 million dangerous buildings in rural areas, which will create steady demand for cement industry.