Cement prices in China are rebounding strongly as producers seek to improve profitability following intense price competition through 2023 and 2024. Cement prices rose by 21.2 per cent YoY in March and are up 14.6 per cent YtD, according to data from Ccement.com. This follows a 22.7 per cent YoY contraction in 2023 and 3.3 per cent YoY fall in cement prices in 2024. 
 
Selling prices are up nationwide partly due to government efforts to reduce excessive competition within the industry. According to China Cement Network, regional enterprises in the Zhejiang province, south of Shanghai, were instructed in March to raise the price of bulk cement by CNY20/t (US$2.80/t), those in Hubei province by CNY30/t, while producers in the East China Yangtze River Delta region and Anhui region were preparing to push up prices by CNY20-30/t.
 
However, low priced imported cement is considered a risk for the Beijing-Tianjin-Hebei region. Vietnam was the main importer of cement in 2024, accounting for 99 per cent of the 45,164t imported into China during the year, while South Korea accounted for 73 per cent of the 261,758t of clinker imports and Japan 27 per cent. Meanwhile, insufficient demand is making it difficult to increase prices, with some areas, such as in the Shandong region, reverting back to pre-rise levels, and others yet to implement the required price rises, namely in Xinjiang, western China.
 
Companies appearing not to comply with orders risk facing penalties. According to China Cement Network, in the second half of March, some enterprises in Liaozhong did not cooperate with a planned kiln shutdowns and production restrictions and now face stiff price reductions that will inevitably hit already struggling profit margins. Official cement prices for the district have been reduced by CNY130-180/t and further price reductions are expected.
 
Cement profit margins are likely to modestly recover, supported by government policies to control production, lift prices and accelerate capacity exit. However, ultimately until the severe overcapacity problem is addressed, Chinese cement producers will remain under pressure.