Summary of the 2025 China Materials Tour: Meeting with Digital Cement Industry Overview - **Industry**: Cement Industry in China - **Key Expert**: Ms. WANG Xiaoliang, Chief Analyst at Digital Cement Core Insights 1. **Cement Demand Forecast**: Cement demand is expected to decline by 6% year-over-year (YoY) in FY26, primarily due to a continued weakening in the property sector (down 6% YoY) and infrastructure spending (down 7-8% YoY) [3][4] 2. **Capacity Replacement Progress**: Capacity replacement in the cement industry has progressed ahead of expectations, with approximately 90 million tons completed year-to-date (YTD). The forecast for FY25 is a total of 130-150 million tons, surpassing the initial estimate of 100 million tons [2][2] 3. **Current Capacity Replacement Ratio**: The current capacity replacement ratio stands at approximately 1:1.6, indicating a significant level of overcapacity in the market [2][2] 4. **Corporate Sentiment**: Most companies in the cement sector are adopting a wait-and-see approach, particularly in the first half of FY26, as they anticipate how capacity control enforcement will unfold. Strict enforcement is expected to begin in the second half of FY26 [2][2] 5. **Collaborative Fund Discussion**: A collaborative fund among leading cement players is currently under discussion, but it remains in the early stages and is not expected to have a meaningful impact in the next 1-2 years [4][4] Additional Important Points - **Demand Deterioration**: There has been an accelerating deterioration in cement demand since the fourth quarter of FY25, which is a critical concern for the industry moving forward [3][3] - **Profit Pressure**: Cement profits are likely to remain under pressure over time due to the ongoing decline in demand and the overproduction capacity in the market [1][1] This summary encapsulates the key findings and insights from the meeting with Digital Cement, highlighting the challenges and outlook for the cement industry in China.