In the first half of this year, weak demand, high inventory and tight capital became common phenomena in the cement industry, and the "haze" hung over the whole industry for a long time. Faced with the market situation of "cold winter", some enterprises can't hold back from the historical stage of cement, while some cement enterprises have started the "self-help" mode.

Selling at reduced prices to maintain the market share of enterprises

When the demand of cement market is depressed, in order to maintain the market share and ensure the normal operation of enterprises, reducing sales price has become one of the commonly used "self-help" methods.

According to the National Cement Price Index (CEMPI), by the end of June, the index had closed at 117.61 points, down 1.28% from the previous month and 19.09% from the same period last year. Since April this year, the index has continued to decline, falling all the way to a new low of nearly five years.

With the decline of real estate investment and the number of new projects, the demand for cement is expected to be affected, but the impact is unexpected. Since the beginning of this year, affected by the poor situation of the real estate industry, the demand for cement in Guangdong has fallen by 20-30%, and the contradiction between supply and demand has intensified. At present, Guangxi cement is shipped to the Pearl River Delta market, and the in-place price is only about 290 yuan/ton. The ex-factory price of some Guangxi cement enterprises is even as low as 190 yuan/ton, far below the cost price, and the market situation is grim.

Selling inefficient assets to ease the pressure on enterprises

Cement enterprises are facing the pressure of imbalance between supply and demand and declining market demand, which leads to increasing pressure on enterprises and severe operating conditions. In this case, many cement enterprises choose to "abandon" inefficient assets to alleviate the pressure. Cement enterprises gradually eliminate inefficient assets by eliminating old equipment and stopping production of substandard production lines.

For example, Zhejiang Southern Cement transfers 100% equity of Cixi Southern Cement and the transferor's creditor's rights to the target company of RMB20,438,800, with the reserve price of RMB55,565,100; Jidong Cement Tongchuan Co., Ltd. sold machinery and equipment for production lines of No.7 and No.8 kilns, with a reserve price of nearly 95 million yuan. The starting price of 1.8 million tons of grinding capacity index and 1.24 million tons of clinker capacity index under the name of Tangshan Yandong Cement Auction is 134 million yuan.

Overall peak shifting production to improve the relationship between supply and demand in the market

Jiangxi Cement Association issued the Notice on Carrying out Peak-shifting Production in July-August 2023 and Implementing the Work Requirements for Stop in the First Half of the Year. The contents of the notice show that the unified peak-shifting production plan for 48 clinker production lines in the province will be carried out temporarily in no less than 13 days from July to August, and all peak-shifting plans must be fully implemented before August 31. At the same time, we will continue to implement the make-up work for the units that plan to stop less in the first half of the year and have not finished making up the stop, so as to ensure that the annual cumulative production plan of each unit is full.

Shandong Cement Association requires that every clinker production line of cement clinker enterprises stop kiln for 15 days from July 1 to July 31, 2023. For the clinker production line that has not stopped for full time in May, it is necessary to make up for the lack of stop time during this peak production period.

Chongqing requires cement clinker enterprises: from July 1, 2023 to August 31, 2023, the average peak shift of 46 clinker production lines in 31 enterprises is not less than 30 days, and the cement mill produces peak shifts.

The Fujian Provincial Department of Industry and Information Technology requires that the peak-shifting production time of each production line should be no less than 65 days. This year, the intensity of peak shifting of cement enterprises in Fujian Province will be enhanced, which is expected to be around 120 days.

Sichuan Cement Association requires all 109 cement clinker production lines of 89 all-round cement enterprises in the province to implement peak-shifting production. The annual peak-shifting production benchmark days of each cement clinker production line is 130 days +X days (x refers to the temporary adjustment of kiln shutdown days every quarter according to factors such as environmental protection, energy consumption, carbon reduction and environmentally sensitive period). Among them, the kiln was closed for 40 days in the third quarter.

The Yunnan Provincial Department of Industry and Information Technology and the Department of Ecology and Environment jointly issued a document stating that all cement clinker production lines in the province should comprehensively plan and carry out peak-shifting production in an orderly manner during the Spring Festival, the hot summer days, the rainy season and major events. For areas with relatively prominent structural contradictions, key peak shifting production management will be adopted. The annual plan is about 100-150 days, and the third quarter is planned to be completed in 60 days.

Guizhou plans to stop kiln for 60 days in the third quarter; In July in Hebei, enterprises in central and southern Hebei increased peak production for 10 days; Shaanxi started summer peak shifting production from May to July and stopped kiln for 30 days; From May to August in Guangdong, production will be stopped for about 15 days every month ...

Speeding up technological transformation and improving enterprise competitiveness

The application of air compressor in cement industry is mainly to generate high-pressure gas to drive pneumatic equipment and systems, and realize the functions of material conveying, tool driving, fluid control and dust removal in cement production. The improvement of energy efficiency of air compressor has a significant impact on the benefit of cement plant, including reducing energy consumption and operating costs, improving production efficiency and output, and reducing environmental pollution. Therefore, many cement plants are improving the economic and environmental benefits of cement plants through energy-saving replacement and energy-saving technical transformation of  air compressors.

For example, the energy-saving effect of energy-saving and non-energy-saving air compressors can reach about 30%. Although the purchase cost of energy-saving air compressor is high, its purchase cost can be recovered within 1 ~ 2 years of equipment operation. From the perspective of long-term interests, it is necessary for owners to use energy-saving air compressors. An enterprise transformed the original ordinary power frequency air compressor into a permanent magnet variable frequency two-stage air compressor, and the power saving rate reached 31.39%, as shown in Table 1. Because the energy-saving efficiency of energy-saving air compressors in each enterprise may be different, and the original air compressor manufacturers in each factory are different, the data may be biased. According to the enterprises that mainly do  energy-saving air compressors in China market, the energy-saving efficiency of energy-saving air compressors can reach 25% ~ 35% compared with ordinary air compressors.