In 2025, China's cement industry entered a “winter” of profound restructuring. Core operational indicators faced mounting pressure as supply-demand imbalances intensified, leaving the sector in disarray.
Data from the National Bureau of Statistics revealed that China's cement output in 2025 fell below 1.7 billion tons, hitting a decade-low with a year-on-year decline of 6.9%. The clinker capacity utilization rate dropped to 48%, leaving over half of the production capacity idle.
Persistent weakness in demand remained the core driver of the industry's downturn.
In 2025, national fixed-asset investment (excluding rural households) declined by 3.8% year-on-year. Infrastructure investment (excluding power) fell by 2.2%, while real estate development investment plummeted by 17.2%. New housing starts decreased by 20.4%. As the core driver of cement demand, the deep adjustment in real estate directly led to a sharp contraction in residential cement consumption. The lackluster infrastructure investment failed to effectively offset this shortfall, ultimately resulting in an overall 6.9% decline in market demand and further exacerbating the supply-demand imbalance.
Weak demand directly impacted pricing, with national cement prices exhibiting a pattern of “high early in the year, low later, and fluctuating downward at the bottom,” marking the worst “peak season” in years. .
By the end of 2025, the national average cement price had fallen approximately 85 yuan per ton from its peak earlier in the year. Traditional hotspots like the Yangtze River Delta and Pearl River Delta were hit hardest, with these former “price strongholds” becoming “price basins.” Factory-gate cement prices briefly dipped below 200 yuan per ton, entering the “100-yuan range.”
The prolonged price slump triggered vicious “internal competition” among enterprises. In some regions, prices fell below the cost line, significantly pressuring industry profitability and intensifying operational difficulties for companies. The sector faced a grim situation characterized by “declining volume, weak pricing, and strained profitability.”
Looking ahead to 2026, as the opening year of the 15th Five-Year Plan, the cement industry will enter a critical adjustment phase of zero-sum competition. Multiple variables on both the supply and demand sides will intertwine, leading to a profound reshaping of the industry landscape. However, the fundamental challenges remain unresolved and may even intensify, with the “law of the jungle” potentially becoming the norm in industry competition.
On the supply side, the 2025 “Work Plan for Stabilizing Growth in the Building Materials Industry (2025-2026)” issued by six ministries including the Ministry of Industry and Information Technology has made cement capacity control a core measure, explicitly requiring precise alignment between enterprises' registered capacity and actual production capacity. In 2026, the ongoing drive to bring clinker production capacity into compliance will become the primary force reshaping the market supply landscape. The previously widespread phenomenon of overproduction (with some enterprises operating at 20%-40% above their registered capacity) will face strict rectification, leading to a further contraction in total clinker capacity by 2026.
Concurrently, capacity replacement policies will intensify the divergence among enterprises: Leading companies will expand compliant capacity through internal replacements and mergers/acquisitions while phasing out inefficient capacity to consolidate market dominance. while small and medium-sized enterprises, constrained by capital pressures and high replacement costs, will show low willingness to replace capacity. Some companies will voluntarily exit the market, likely leading to continued industry consolidation. However, it should be noted that even after full compliance with capacity regulations, the industry will still face extremely severe overcapacity due to persistently declining demand.
On the demand side, downward pressure will persist, with total contraction and structural divergence becoming more pronounced. Industry projections indicate that national cement demand will decline by 5% year-on-year in 2026, falling from 1.69 billion tons in 2025 to approximately 1.6 billion tons. Although the rate of decline will narrow compared to 2025, the overall downward trend remains unchanged.
Structurally, infrastructure investment will play an increasingly vital role in stabilizing growth. With major projects under the 15th Five-Year Plan accelerating implementation, analysts anticipate that infrastructure investment will remain a key growth stabilizer amid the ongoing bottoming-out of the real estate sector. Infrastructure investment growth is projected at 4.5% in 2026, continuing to underpin cement demand. Meanwhile, the real estate market will remain in a deep adjustment phase at the bottom. Affected by high commercial housing inventories and a sustained decline in new construction starts, residential cement consumption may further decrease.
Impacted by falling demand and market turbulence caused by the industry's rapid push to resume production, mutual trust among enterprises has weakened. The implementation and effectiveness of off-peak production will face severe challenges.
By 2026, the cement industry will enter a critical phase of zero-sum competition, where diverging demand and intensified competition will become increasingly pronounced. Only by forging new industry-wide consensus, strengthening collaboration, and proactively pursuing transformation can the sector break through this zero-sum dynamic and gradually return to a healthy, sustainable development trajectory.
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