Cement prices experience a phased increase with limited industry profit recovery

Securities Times reporter Sun Xianchao

Recently, the domestic cement market has experienced a phase of price increases. According to interviews conducted by the Securities Times, multiple factors, including cost support, staggered production, and marginal recovery in demand, have caused this round of seasonal price hikes to start earlier than in previous years, and it has shown a significant regional differentiation pattern.

Industry insiders expect that the concentrated release of infrastructure demand in the second quarter is likely to further open up price upside potential; however, the core contradiction of industry overcapacity has not fundamentally changed, and price recovery still exhibits both phase and structural characteristics.

Cement prices rise

In 2025, due to ongoing declines in real estate investment and a slowdown in infrastructure investment growth, domestic cement demand continued to fall, compounded by fierce market competition, leading to a continuous decline in annual cement prices. According to monitoring by CCA Digital Cement Network, the average transaction price in the national cement market (the ex-factory price of PO42.5 bulk cement) for 2025 was 367 yuan/ton, down 17 yuan/ton compared to the previous year, a decline of 4.4%.

In the first two months of 2026, the overall trend of cement prices has been difficult to be optimistic about. However, the situation has recently changed.

Recently, several listed cement companies’ subsidiaries have issued price increase notices to the market. For example, the Liaoning Jinyu Jidong Cement (000401) Trading Co., a subsidiary of Jinyu Jidong, issued a price adjustment notice on March 14, announcing that starting from 6 PM on March 15, 2026, the ex-factory price of all cement sold to Jilin Province would be raised by 40 yuan/ton.

Hua Xin Cement (600801) (Daye) Co., a subsidiary of Huaxin Building Materials, stated in a notice on March 20 that starting from 6 PM on March 21, 2026, the price of all varieties of bulk cement sold in the Huangshi, Yangxin, Daye, and Ezhou regions would be increased by 20 yuan/ton.

Jianfeng Group’s Daye Jianfeng Cement Co. also issued a price adjustment notice on March 20, stating that starting from 12 PM on March 21, 2026, the sales prices of bagged and bulk varieties of cement in the Wuhan area would be raised by 20 yuan/ton.

As of March 20, the Cement Price Index reported by Baijian Building Network was 335 yuan/ton, an increase of 4 yuan/ton from early March.

Wang Long, who runs a building materials business in Changchun, told the Securities Times that it was the first time since last year he received a price increase notice from a cement manufacturer, with the ex-factory price raised by 20 yuan/ton.

A staff member from a sales company of Yatai Building Materials confirmed over the phone that the company’s ex-factory price for cement has recently been raised by 40 yuan/ton.

Data monitored by Zhuochuang Consulting shows that from February 24 to March 20, leading cement companies in Northeast China, Jin-Ji-Lu-Yu, East China Yangtze River Delta, Sichuan-Chongqing, and the Shaanxi Guanzhong region successively raised prices. In Northeast China, two rounds of price increases were completed, with a cumulative notice of 90-100 yuan/ton and an actual increase of 20-40 yuan/ton; the Guanzhong area of Shaanxi and the Jin-Ji-Lu-Yu region notified a price increase of 20-30 yuan/ton in mid-March, but actual transactions have yet to be realized; in the East China Yangtze River Delta, cement and clinker prices were notified to increase by 20 yuan/ton, which has been basically implemented.

Analyst Hou Linlin from Zhuochuang Consulting believes that compared to previous seasonal price increases, the timing of this round of price hikes is earlier and the regional differentiation is more pronounced. Traditionally, seasonal price increases would start between mid to late March and early April, coinciding with the full resumption of construction sites and concentrated release of demand. This round shows more significant regional differentiation, with a characteristic of rising prices in the north and falling prices in the south. In previous years, East China would lead the price increase and then drive a nationwide response; this year, Northeast China took the lead, while East, South, and Southwest China are still seeing price declines. When Northeast China began its second round of increases, East China started to rise, but the downward trend in South China did not stop.

Analyst Li Kunming from China Cement Network·Cement Big Data Research Institute stated that cement and clinker prices in East China generally increased by 20 yuan/ton, but the implementation effect was not as expected. Although market demand is marginally recovering, it remains at a low level; the price increase process is gradually advancing but has not fully materialized.

Multiple factors resonate

Regarding the recent rise in cement prices, Li Kunming believes that the core drivers of this round of price increases are threefold: first, the weather improved after the Lantern Festival, workers officially returned to work, and downstream construction sites accelerated operations, leading to a marginal recovery in demand; second, cement prices have been declining throughout 2025 and are at a near-term low, resulting in a strong desire for price increases within the industry; third, coal prices remain relatively high, forming rigid support on the cost side.

“The main reason for this round of price increase is rising costs and coordinated price adjustments among leading enterprises,” pointed out Hou Linlin. Currently, actual demand is recovering more slowly than in previous lunar calendar years; northern clinker inventories are ample, and the market does not have conditions to push for price increases. However, a significant rise in coal prices in February pushed up production costs, coupled with pre-holiday cement prices approaching or even falling below the cost line, further squeezing profit margins for enterprises. Therefore, mainstream enterprises in Northeast, North, and East China have increased self-discipline in kiln suspensions and collaborated to push for price increases.

Analyst Jiang Yuanlin from Baijian Building Cement believes that on the supply side, staggered production during the heating season has led to an average decline of 21 percentage points in clinker inventories in Northeast China and Henan, while regions like Zhejiang have implemented capacity self-discipline control to actively reduce supply; on the cost side, an increase in oil prices in March has led to an increase in transportation costs of 26-39 yuan per ton of cement, with rising energy and raw material costs providing support; on the demand side, the acceleration of resumption of infrastructure projects after the holiday has led to a more than 30% month-on-month increase in cement procurement for key projects, and the improvement in demand also aids price transmission, with enterprises’ demand for profit recovery becoming an important driving force.

Jiang Yuanlin emphasized that this price increase can only temporarily alleviate the low-price competition and profit pressure in the industry; it cannot fundamentally resolve the supply-demand contradiction. In the short term, price adjustments will directly expand the profit margins of enterprises, with leading companies seeing more significant improvements. In the long term, the pattern of industry overcapacity remains unchanged, with some southern regions’ inventories exceeding the 60% warning line. If subsequent demand recovery falls short of expectations, it is not ruled out that companies will lower prices again to capture market share. At the same time, cost pressures continue to exist, and small and medium-sized enterprises have a weaker ability to transmit costs, with profit recovery lagging behind that of leading enterprises, leading to further industry differentiation.

Limited industry profit recovery

The reporter noted that although cement demand continued to weaken in 2025 and cement prices decreased, some listed companies in the cement industry have seen a certain degree of profit recovery thanks to declining costs.

Huaxin Building Materials expects to achieve a net profit of 2.7 billion to 2.95 billion yuan in 2025, an increase of 11.6% to 21.9% year-on-year. One reason for the growth in net profit is the decline in fuel costs and the company’s deepening of various cost-reduction and efficiency-increasing measures, leading to a recovery in the unit profit of major products.

During a conference call on March 19, Taiping Group mentioned that in 2025, the average sales cost of cement for the company decreased more than the price decline, resulting in an improvement in the profitability of the main business, with a comprehensive gross profit margin increasing by 2.37 percentage points year-on-year.

In the conference call, Taiping Group provided its outlook for cement prices in 2026, stating that prices have shown some loosening post-Spring Festival, with the Pearl River Delta market recently adjusting by about 40 yuan/ton, slightly lower than the same period last year, primarily affected by the slow resumption of real estate work after the Spring Festival and the reform of the value-added tax on concrete. Whether prices will increase in the future will depend on the recent recovery of cement demand.

Jiang Yuanlin predicts that in 2026, cement prices will generally present a steady upward trend with regional differentiation; in the second quarter, with the concentrated release of infrastructure demand, the national average cement price is expected to rise by 5%-8%, with regions like Northeast and Northwest having room for price increases due to a balanced supply-demand situation, while areas with sufficient production capacity like the Yangtze River Delta will primarily maintain stability, with a low probability of significant increases. On the supply-demand structure, staggered production on the supply side and industry self-discipline will continue to exert force, maintaining the capacity utilization rate at around 55%, with no large-scale supply release pressure; on the demand side, infrastructure investment will play a supporting role, while real estate demand shows marginal improvement but with limited recovery space, the overall demand decline is further narrowing, and the industry supply-demand will maintain a weak balance, with profitability gradually recovering to near three-year averages.

“In the second quarter, cement demand will seasonally improve compared to the first quarter, but there will still be a significant gap compared to the same period last year; the phase of demand recovery will drive prices up, but it is difficult to return to the levels seen in the first half of last year,” said Li Kunming. The current core contradiction in the industry remains a weak supply-demand structure; although production capacity control has pushed the registered clinker capacity below 1.7 billion tons, the decline in demand is more significant, and the supply-demand contradiction has only marginally eased, not fundamentally reversed.

(Edited by Zhang Yang HN080)

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