Cement stocks experienced a collective decline. At the time of writing, CNBM (03323) fell 7.1% to HKD 5.23. CR BLDG MAT TEC (01313) dropped 4.35% to HKD 1.32. DONGWU CEMENT (00695) decreased 4.26% to HKD 7.42. HX BLDG MAT (06655) declined 3.8% to HKD 15.18. CONCH CEMENT (00914) was down 2.95% to HKD 19.74. WESTCHINACEMENT (02233) fell 2.05% to HKD 2.39.

Analysts point to a significant downturn in industry conditions during the first quarter. Data indicates that the national average cement price per ton for 2025 and Q1 2026 was RMB 367 and RMB 343, representing year-on-year declines of 4.4% and 13.5%, respectively. Revenue for listed cement companies totaled RMB 275.8 billion and RMB 46.3 billion for these periods, both down approximately 10% year-on-year. Net profit attributable to shareholders was RMB 6.9 billion and a loss of RMB 200 million, reflecting year-on-year decreases of 40% and 148%, respectively, with the industry broadly reporting losses in Q1 2026.

As a typical high-carbon-emission industry, cement faces weakening downstream demand. Under carbon constraints, the operational costs for less efficient, outdated production capacity are rising, further eroding its competitiveness and potentially accelerating its exit from the market. Concurrently, local governments, aiming to develop higher value-added industries within limited carbon quotas, may reduce carbon allowances for the cement sector. This policy pressure is expected to hasten the clearance of excess industry capacity.

The view is that the cement industry is currently at a cyclical profit trough. The accelerated exit of supply is expected to hasten the rebalancing of industry supply and demand. Consequently, the profitability of the cement sector is anticipated to gradually recover.