Since the Lunar New Year, the cement market in Northeast China has led the recovery, implementing a step-by-step price adjustment strategy to steadily increase prices. As of March 15, some areas in the Northeast have completed three consecutive rounds of price hikes, with a cumulative increase reaching 100 yuan per ton. Concurrently, major enterprises in East China, North China, and Northwest China have followed suit, signaling a clear recovery in the cement market. Multiple securities firms believe the core logic for the cement industry in 2026 lies in supply-side optimization. A combination of policies is expected to accelerate the phase-out of inefficient capacity, enhance industry concentration, and further strengthen the profitability and market position of leading companies. Related stocks include CONCH CEMENT (00914), HX BLDG MAT (06655), and CNBM (03323).
The current round of price adjustments was implemented progressively in three phases. In late February, as demand from major construction terminals began and building material costs rose, the first increase of 40 yuan per ton was implemented, solidifying the market price floor. In early March, a second increase of 30 yuan per ton further consolidated the upward price trend. On March 15, a further increase of 40 yuan per ton was implemented, bringing the total three-round increase to over 100 yuan per ton, with the trend covering Heilongjiang, Jilin, Liaoning, and parts of Eastern Inner Mongolia.
The price increase effect from the Northeast is continuing to spread, gradually forming a nationwide pattern of linked cement price increases. Leading cement enterprises in East China, North China, and Northwest regions are closely following the industry's recovery pace, successively issuing their own price adjustment policies and synchronously raising the ex-factory prices for various cement grades. According to data from a construction industry website, since mid-March, cement companies in Anhui, Jiangsu, Zhejiang, and other areas have intensively issued price adjustment notices, generally raising cement prices by 20 to 40 yuan per ton. Price increases for bulk cement in the Yangtze River Delta have been implemented, with mainstream brand P.O42.5 bulk cement prices rising by 20 yuan per ton in Northern Zhejiang and Southern Jiangsu. Shanghai followed with price adjustments, leading to a noticeable increase in shipments and a drop in inventory levels to 31%, indicating continuous improvement in market supply-demand dynamics.
A senior analyst from the construction industry website suggests three core factors supporting this round of price increases. Firstly, March and April are traditionally peak construction seasons, leading to a gradual recovery in cement demand. Secondly, previous staggered production peaks have resulted in clinker inventories remaining at medium-to-low levels, with the national clinker storage capacity ratio falling below 50%, indicating manageable inventory pressure. Thirdly, companies have a strong desire to restore profits, coupled with rising costs of raw materials like diesel and coal, providing substantial support.
From a macroeconomic perspective, as the beginning of the 15th Five-Year Plan period, major infrastructure projects are accelerating their implementation, with enhanced funding support. Urban renewal and renovation projects are also progressing steadily. Pengyuan Credit Rating suggests these factors are expected to provide core support for cement demand, while policies such as "Dual Carbon" and "Dual Control" will continue to optimize industry supply. Cement demand in 2026 is projected to show a moderate overall decline, but the rate of decline is expected to narrow.
On the policy front, in September 2025, the Ministry of Industry and Information Technology, jointly with six other departments, issued the "Work Plan for Steady Growth in the Building Materials Industry (2025-2026)". This plan requires cement enterprises to formulate capacity replacement plans for production capacity exceeding project filings by the end of 2025, promoting alignment between actual capacity and filed capacity. According to statistics from a digital cement network, by the end of 2025, the national cement industry had phased out a total of 160 million tons of clinker capacity through replacements (estimated actual exit around 200 million tons considering overproduction). It is projected that by the end of the first quarter of 2026, the total phased-out clinker capacity will reach 200 million tons (estimated actual exit around 250 million tons considering overproduction), with actual capacity expected to drop from 21 billion tons to 18 billion tons.
Multiple securities firms believe the core logic for the cement industry in 2026 lies in supply-side optimization. CITIC Securities explicitly stated that robust demand (from infrastructure) and supply-side coordination are dual drivers of this price hike. GF Securities previously released a report noting that after two years of policy preparation and communication, 2026-2027 will see supply-side policy controls dominated by "overproduction management + carbon market," which is expected to lead to the gradual exit of overcapacity and outdated capacity in the cement sector. Supply optimization is anticipated to lift the industry's profit center. In the medium to long term, cement industry supply is expected to continue optimizing, suggesting attention to cement assets at their cyclical bottom.
Related concept stocks: CONCH CEMENT (00914): Data shows that in the first three quarters of 2025, Conch Cement achieved operating revenue of 61.298 billion yuan, a year-on-year decrease of 10.06%, and net profit attributable to equity holders of the parent company of 6.305 billion yuan, a year-on-year increase of 21.28%. HX BLDG MAT (06655): HX BLDG MAT's key focus markets in Africa saw high and rising prices year-on-year. Prices in Zambia, Tanzania, South Africa, and Nigeria all increased year-on-year in 2025. Its subsidiary Lafarge Africa, primarily operating in Nigeria, reported 2025 net profit exceeding expectations. According to Lafarge Africa's disclosed 2025 financial report, it achieved a net profit of 273.1 billion Naira (approximately 1.28 billion yuan, calculated at 1 yuan = 213 Naira) for 2025. In Q4 2025, Lafarge Africa achieved a net profit of 65.3 billion Naira (approximately 320 million yuan, calculated at 1 yuan = 205 Naira). CNBM (03323): CNBM previously anticipated a maximum attributable loss of approximately 4 billion yuan for shareholders in 2025, mainly due to asset impairment of 6 to 8.3 billion yuan related to cement capacity replacement. Bank of America Securities released a report stating the loss magnitude far exceeded their expectations. The bank believes the expectation of a full-year 2025 dividend yield of about 5% is at risk. However, the bank views this asset impairment as a one-time event. With the cement capacity replacement window closing at the end of March, the room for further impairment is limited.
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