According to the latest news from Cement Network, as market demand in various regions shows a mild recovery, cement companies are continuously implementing staggered kiln shutdowns. Coupled with the fact that current cement prices remain at historically low levels, the operational pressures on these companies have significantly increased. To improve profitability, cement firms are actively raising cement prices. On September 24th, the Ministry of Industry and Information Technology, the Ministry of Natural Resources, the Ministry of Ecology and Environment, the Ministry of Housing and Urban-Rural Development, the Ministry of Water Resources, and the Ministry of Agriculture and Rural Affairs issued the "Construction Materials Industry Stabilization Growth Work Plan (2025-2026)." This plan includes strict control over cement and glass production capacity, prohibiting any new cement clinker or flat glass capacity. New or reconstructed projects must establish capacity replacement plans, and transferring cement clinker and flat glass capacity from non-key areas for air pollution control to key areas is strictly prohibited.
Recently, the market demand in Zhejiang has slowly recovered, and enterprises have seen a slight improvement in shipment volumes. However, previous price increases have generally fallen back to pre-increase levels, maintaining low price operations that exert considerable pressure on businesses. To enhance profitability, some leading enterprises in northern Zhejiang will raise various cement prices by 30 yuan per ton starting October 15, although the implementation remains to be observed. Additionally, reports indicate that in central and southern Zhejiang and the coastal market, prices have decreased following a 20 yuan per ton increase in September, with actual transactions commonly dropping around 10 yuan per ton.
CICC noted that the national average cement price in September was 338 yuan per ton, up by 2 yuan month-on-month, estimating a gross profit of 58 yuan per ton for cement companies in September, a month-on-month increase of 3 yuan. The firm is optimistic about marginal improvements in industry demand entering the peak season and expects prices to rebound after price increases are implemented. Tianfeng Securities reported that in the first half of 2025, the cement sector generated revenue of 118.1 billion yuan, down by 7.7% year-on-year, with a net profit attributable to the parent company of 5.2 billion yuan, up by 1487% year-on-year. The return on equity (ROE) was 1.4%, an increase of 1.3 percentage points year-on-year, primarily benefiting from improvements in both prices and costs. The firm believes that the bottoming out of the cement fundamentals may have occurred, with reduced supply and increased demand from infrastructure support expected to show a trend of gradual improvement in the second half of the year. Related Hong Kong stocks in the cement building materials sector include