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  • New dry cement policy will be fine-tuned
  • Release date:2019-03-11  Clicks:91  Classification:Industry News
  • "2010 will be the year when new policies of cement industry are introduced intensively." Lei Qianzhi, president of China Cement Association, said, "This year, the cement industry will face more considerations and the elimination speed will be accelerated." The newly revised industrial policies, industry access standards and clear elimination of backward tasks all require enterprises to restrict emissions strictly and explicitly. The energy saving and emission reduction of cement industry is facing new pressure.

    The Circular on Further Strengthening the Work of Eliminating Backward Production Capacity recently issued by the State Council clearly stipulates the specific criteria for eliminating backward production capacity, which makes the idea of eliminating backward production capacity in various industries clearer. Further tightening of policy will make the phase-out of cement lag behind and enter a substantial acceleration stage. At present, the provinces have made their best efforts to speed up the elimination of backward production capacity.

    New dry methods will not be able to develop vigorously

    According to the data provided by China Cement Association, there are 2.02 billion tons of cement production capacity in China, and about 390 million tons of backward cement production capacity. After all the construction projects in China are completed, 620 million tons of new cement production capacity will be added. It is estimated that the cement consumption will be 1.6 billion to 1.8 billion tons in 2010. If the existing backward production capacity and small grinding stations are not completely eliminated, the excess capacity of backward cement will be obvious.

    Kong Xiangzhong, secretary-general of China Cement Association, introduced that in the upcoming "12th Five-Year Plan" of the cement industry, even the new dry process cement line that the state has been supporting has a new view. The plan will change the formulation of vigorously developing new dry methods into moderate development.

    In fact, the elimination of backward production capacity in the cement industry began in 2009. It is understood that in 2009, the national production capacity of cement clinker was 94.21 million tons (equivalent cement capacity was about 120 million tons). Among them, the production capacity of backward clinker such as shaft kiln was 83.59 million tons, and the production capacity of small new dry clinker, which lacked competitiveness in early construction, was 10.62 million tons.

    However, the current elimination efforts are obviously not enough. The Notice on Further Strengthening the Work of Eliminating Backward Production Capacity issued by the State Council ranks the cement industry as a key industry. The Circular deepened the contents of the Circular of the State Council on Suppressing Overcapacity in Some Industries and Guiding the Healthy Development of Industries by Repeated Construction (No. 38 of Guofa [2009], hereinafter referred to as No. 38) approved by the State Development and Reform Commission and other departments in 2009, and clarified the elimination tasks of overcapacity industries in the next three years.

    According to relevant documents, by the end of 2012, the cement mechanized shaft kiln production line with kiln diameter less than 3.0 meters, dry process hollow kiln with kiln diameter less than 2.5 meters (except for producing high alumina cement), wet process kiln production line with cement (except for sludge and carbide slag), cement mill with diameter less than 3.0 meters (except for producing special cement) and cement soil (eggs) kiln will be eliminated. Backward cement production capacity such as ordinary vertical kiln.

    Detailed Target Decomposition and Implementation

    At present, the Ministry of Industry and Information Technology has initially issued a plan for eliminating backward production capacity from 2010 to 2012 to all provinces, autonomous regions and municipalities directly under the Central Government. Considering the obvious regional characteristics of China's cement industry, there are great differences in development level, market capacity, technology and capital strength among different regions, the Ministry of Industry and Information Technology will also fully consult with local governments and relevant departments to finalize specific objectives on the basis of clarifying the family background and verifying the situation.

    The relevant person in charge of the Ministry of Industry and Information Technology said, "The state will strengthen supervision and inspection, implement accountability system, and incorporate the achievement of the goal of eliminating backward production capacity into the performance appraisal system of local governments." At present, each region has made its own unique tactics and made preparations in advance.

    Industry insiders pointed out that from the perspective of decomposition and implementation methods, it will effectively mobilize the strength of provinces, so that the elimination of backwardness is no longer a slogan.

    Implementing Key Breakthroughs in Guangdong

    Sensitivity is second only to Shandong's Guangdong Province. This year, key breakthroughs will be implemented to eliminate backward production capacity.

    Recently, the Guangdong Provincial Committee on Economy and Informatization has compiled the Special Plan for the Development of Cement Industry in Guangdong Province. According to the plan, the future cement industry in Guangdong Province will focus on three major bases: northern, western and Eastern Guangdong. This year, the backward cement production capacity in the Pearl River Delta will be basically eliminated; by the end of 2012, the backward cement production capacity of the three major bases will be basically eliminated; by 2015, the production capacity of new dry cement clinkers in northern, western and Eastern Guangdong will account for 35.45%, 32.73% and 25.46% of the whole province respectively.

    Jiangsu's Breakthrough is Energy Saving and Consumption Reduction

    In the Yangtze River Delta region, where production capacity is more competitive, Jiangsu Province will strive to eliminate all vertical kilns this year by taking energy saving and consumption reduction as a breakthrough.

    According to preliminary accounting, the energy consumption per unit GDP of Jiangsu Province decreased by 5.17% in 2009.By the end of 2009, the province had eliminated 20 million tons of backward cement. This year, Jiangsu Province intends to reduce its overall energy consumption by another 4% compared with last year.

    Everbright Securities believes that, benefiting from the backward cement production capacity in the next three years, 300 million to 350 million tons will be eliminated. The most sensitive provinces to implement the measures are Shandong, Guangdong, Hebei and Jiangxi in turn.

    Shandong Province "Change Certificate" to Control Production Capacity

    Shandong, which has been the country's top cement producer, has taken the lead in urging enterprises to eliminate backward production capacity by renewing production licenses. Since 2008, the cement output of Shandong Province has dropped by 12.9%, and the total output ranks in the country has dropped from the first to the second for 16 consecutive years.

    The head of Shandong Industrial Product Production License Office said that 155 cement enterprises which had not applied for replacement of production license had been investigated one by one recently, and 101 of them would cancel production license. This means that 142 vertical kilns and 4 small rotary kilns will be phased out this year, and 14.124 million tons of backward cement production capacity will be eliminated.

    In order to achieve this goal, Jiangsu strives to eliminate all cement vertical kilns this year. In addition, taking advantage of the rapid development of energy-saving and environmental protection industry, we will overcome more technical difficulties and serve energy-saving transformation projects, and through key energy-saving transformation projects, we will form the energy-saving capacity of 3 million tons of standard coal.

    Hubei Province as a Mean to Improve Concentration Degree

    In Hubei Province, where infrastructure is more active, backward production capacity will be reduced by means of increasing concentration.

    Zhou Yue, Secretary-General of Hubei Building Material Industry Association, said that during the Eleventh Five-Year Plan period, the proportion of new dry cement in Hubei Province had accounted for 80%. At present, all projects in Hubei have been put into operation, including those approved and already under construction. If all projects are put into operation, the production capacity will be about 110 million tons. After deducting the 10 million tons of production capacity that will be eliminated, and considering the objective factors such as equipment maintenance and rainy season shutdown, the actual capacity utilization rate may be only about 80%, which is basically in line with the current market demand. Therefore, the key to market stability this year is to eliminate backward capacity.

    At present, Hubei Province has more than 150 cement industry enterprises, most of which are small enterprises. In 2008, there were 165 cement enterprises above the scale in Hubei Province, with a total capacity of nearly 46 million tons, but the average size of enterprises was only 279,000 tons. At present, only Huaxin, Gezhouba and Jinglan Group have 10 million tons of capacity, and their industrial concentration is seriously inadequate.

    Experts said that during the "Twelfth Five-Year Plan" period, the key to the development of Hubei cement industry is to improve industrial concentration. At present, Hubei is discussing how to give some policy support to enterprises in terms of policy, taxation and credit, and encourage and support the merger, rectification, upgrading and conversion of backward enterprises.

    Reprinted in "China Cement Network"