Driven by national infrastructure planning and increased local government bond issuance, demand for cement, a fundamental building material, is expected to recover steadily. According to Wind data, as of May 13th, local government bond issuance this year has exceeded 4 trillion yuan, reaching 4.0357 trillion yuan, an 8% increase compared to 3.752 trillion yuan in the same period of 2025. For the cement industry, this large-scale special bond issuance suggests a potential new wave of cement demand is on the horizon, as infrastructure has historically been the primary driver of cement consumption.
Market feedback indicates that rising costs of raw materials like coal, coupled with price increases in surrounding markets, have put pressure on cement producers. With regional cement prices hovering near cost levels, companies are facing operational strain and demonstrate a strong willingness to raise prices.
CICC's research report notes that the cement sector is at a cyclical low, with supply and demand undergoing rebalancing. Looking ahead, in the short term, industry profitability is currently at a bottom, and the strong pricing intention suggests a trend of lower prices/profitability in the first half of the year potentially reversing to higher levels later. Long-term prospects are supported by production restrictions and "dual carbon" constraints, which may accelerate supply-side consolidation. This rebalancing of industry supply and demand is expected to drive a significant improvement in profitability.
Related Hong Kong-listed cement stocks include: CNBM (03323), China Resources Building Materials Technology (01313), Dongwu Cement (00695), Huaxin Cement (06655), CONCH CEMENT (00914), West China Cement (02233), and BBMG Corporation (02009).
CONCH CEMENT (00914) reported Q1 2026 revenue of approximately 17.066 billion yuan, a year-on-year decrease of 10.45%. Net profit attributable to shareholders was about 1.468 billion yuan, down 18.98% year-on-year, with basic earnings per share of 0.28 yuan. To safeguard company value and shareholder rights, bolster investor confidence, and based on confidence in future prospects and recognition of share value, the company plans to use its own funds for a share buyback program not exceeding 1 billion yuan for A-shares and 700 million Hong Kong dollars for H-shares.
West China Cement (02233) has seen the first phase of its Moroto 6000T/D clinker cement production line commence operation. The company previously acquired a major South African cement producer.
Huaxin Cement (06655) focuses on African markets where prices remain high and have increased year-on-year. Prices in Zambia, Tanzania, South Africa, and Nigeria have risen compared to 2025. Its subsidiary Lafarge Africa, primarily operating in Nigeria, reported 2025 net profit exceeding expectations.
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