中国水泥行业展望，2025年1月

Investment Rating - The report maintains a "stable" outlook for the credit quality of the cement industry, although it indicates a weakening trend over the next 12 to 18 months, remaining above a "negative" status level [4]. Core Insights - The cement industry is expected to face continuous pressure on operational performance due to insufficient downstream demand, leading to a fourth consecutive year of negative growth in cement production in 2024. The capacity utilization rate is projected to decline to historical lows [5][11]. - Despite the implementation of counter-cyclical policies in the second half of 2024, which may provide short-term support for cement demand, the long-term outlook remains bleak as demand is expected to decline due to economic structural transformation [5][15]. - The report highlights that while supply-side measures such as staggered production and delayed commissioning are being enforced, the issue of overcapacity in the industry remains prominent. New capacity replacement measures are expected to strengthen the control over cement clinker capacity [5][18]. Industry Fundamentals - In 2024, the cement production is projected to be 1.825 billion tons, a year-on-year decrease of 9.5%, marking a significant drop compared to previous years [11]. - Infrastructure investment and real estate investment are critical factors influencing cement demand. In 2024, these investments are expected to remain weak, with infrastructure investment growth declining by 1.5 percentage points to 4.4% and real estate development investment dropping by 10.6% [8][10]. - The report notes that the average capacity utilization rate for cement in 2024 is expected to fall below 50%, further exacerbating the industry's challenges [11]. Financial Performance - The financial performance of cement companies has weakened, with profitability and cash flow levels declining. The report indicates that the total profit of the cement industry is expected to decrease by approximately 65% year-on-year in 2024, reaching the lowest level since 2006 [26][36]. - The report identifies that companies are increasingly relying on debt financing due to the need for diversified expansion and cash flow management, leading to a deterioration in some companies' debt repayment indicators [36]. - The report emphasizes the need to monitor companies with high financial leverage and deteriorating debt repayment indicators, particularly those with single regional distribution and weak operational capabilities [36]. Policy Environment - The report outlines that the 2024 capacity control and carbon reduction policies will further enhance the regulatory guidance for the industry, with increased restrictions on new capacity and a focus on eliminating inefficient production lines [22]. - The introduction of the national carbon emissions trading market is expected to play a significant role in the industry's capacity reduction and emissions reduction efforts [22][24]. - The report highlights that the new capacity replacement policy emphasizes differentiated measures based on regional, energy efficiency, and environmental performance levels, aiming to retain high-quality production lines while phasing out low-efficiency capacity [22].