SunSirs: Multiple Cement Industry Associations Propose to Resist the Vicious Competition of "Internal Competition" in China

https://www.chemnet.com   Aug 08,2024 SunSirs

Recently, cement industry associations in Shandong, Zhejiang, Shaanxi, Guizhou and other places have issued initiatives calling for a boycott of the "inward competition" that has emerged in the industry.

Promote high-quality development of the industry

In the first half of 2024, as market demand continues to decline, the contradiction between supply and demand in the cement industry intensifies, and the industry exhibits operational characteristics of "continuous decline in demand, low price fluctuations, and sustained losses". In addition, some enterprises have not changed their business thinking of "quantity, cost and profit", and the situation of "competing for quantity at low prices" is becoming increasingly severe.

On August 6th, the Guizhou Building Materials Federation released the "Guizhou Province New Building Materials Industry Strengthening Self Discipline and Preventing 'Internal Rolling' Malignant Competition Initiative", stating that currently, the development of Guizhou's new building materials industry is under triple pressure of demand contraction, supply shock, and weakened expectations. The contradiction between supply and demand is intensifying, and industry confidence is lacking. Industry enterprises compete with each other at low prices and low quality in order to compete for limited resources, resulting in a decrease in industry operating efficiency and innovation ability. Some enterprises even give up their bottom line, reduce quality and price, and occupy the market, causing a vicious competition situation of "bad money driving out good money". Over time, this is extremely unfavorable for the high-quality development of the new building materials industry.

In order to cope with the current industry situation, the Shandong Cement Industry Association calls on its member units to exert efforts in five aspects, including recognizing the situation, maintaining determination, reducing output, and working together to promote the healthy, stable, and high-quality development of the cement industry in Shandong Province.

In addition, cement industry associations in Zhejiang, Shaanxi and other places have also issued initiatives advocating for the prevention of "inward competition" in the cement industry and promoting high-quality development of the industry.

The profit of the cement industry has declined in recent years, and there has been a significant decline in the first half of this year. One of the important factors is the vicious competition of 'internal competition', "said Li Rongshan, Secretary General of Suzhou Cement Association." This phenomenon is particularly prominent in the cement industry. Rational competition helps enterprises gain profits, but vicious' internal competition 'damages the overall interests of the industry and hinders high-quality economic development

Intense market competition

According to statistics from the National Bureau of Statistics, China's cement production in the first half of this year was 850 million tons, a year-on-year decrease of 10% (comparable caliber). Cement production is the lowest value since the same period in 2011, close to the level of the same period in 2010. During most of the first half of the year, price competition in mainstream consumer markets such as the Yangtze River Delta and Pearl River Delta remained fierce, leading to a bottoming out of cement prices. The decrease in quantity and price has led to historic losses in the industry.

According to the statistics of 250 cement enterprises nationwide by the Century Construction Network, the average weekly cement outflow in the first half of the year was 3.616 million tons, a year-on-year decrease of 24.3%. Jiang RMBlin analyzed that the decline in demand has led to fierce competition among cement enterprises, frequent price wars, and the ex factory price of cement in some areas has dropped to 150 RMB/ton, causing serious losses for the enterprises.

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