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 Securities Times reporters, the starting point for this round of seasonal price increases has been advanced compared to previous years, due to the resonance of multiple factors such as cost support, off-peak production, and marginal recovery in demand, and it shows 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, but the core contradiction of excess production capacity in the industry has not fundamentally changed, and price recovery still exhibits phase-specific and structural characteristics.

Cement prices rise

In 2025, due to the continued bottoming out of real estate investment and the slowdown in the growth rate of infrastructure investment, domestic cement demand continued to decline. Coupled with intense market competition, cement prices remained low throughout the year. According to monitoring by CCA Digital Cement Network, the average transaction price of cement in the national market (PO42.5 bulk cement ex-factory price) in 2025 was 367 yuan/ton, a decrease of 17 yuan/ton compared to the previous year, with a decline of 4.4%.

In the first two months of 2026, the overall trend of cement prices is not optimistic. However, there have been recent changes in the situation.

Recently, multiple listed cement companies’ subsidiaries have issued price increase notices to the market. For example, Jinyu Jidong’s subsidiary, Liaoning Jinyu Jidong Cement (000401) Trading Co., Ltd., released a pricing notice on March 14, stating that starting from 18:00 on March 15, 2026, the ex-factory price of all cement sold to the Jilin province region would be raised by 40 yuan/ton.

Hua Xin Materials’ subsidiary, Huaxin Cement (600801) (Daye) Co., Ltd., stated in a notice on March 20 that starting from 18:00 on March 21, 2026, the price of all varieties of bulk cement sold in the Huangshi, Yangxin, Daye, and Ezhou areas would increase by 20 yuan/ton.

Jianfeng Group’s Daye Jianfeng Cement Co., Ltd. also issued a price adjustment notice on March 20, indicating that starting from 12:00 on March 21, 2026, the sales price of bagged and bulk cement in the Wuhan area would rise by 20 yuan/ton.

As of March 20, the Baijian Building Network cement price index reported 335 yuan/ton, an increase of 4 yuan/ton from early March.

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

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

Zhuochuang Consulting’s monitoring data showed that from February 24 to March 20, major cement companies in the three northeastern provinces, Jin-Ji-Lu-Yu, East China Yangtze River Delta, Sichuan-Chongqing, and Shaanxi Guanzhong regions have successively raised prices. Among them, the three northeastern provinces completed two rounds of price increases, with a cumulative notice of 90-100 yuan/ton, and the actual increase ranged from 20-40 yuan/ton; in Shaanxi Guanzhong and Jin-Ji-Lu-Yu regions, a notice was issued in mid-March for a price increase of 20-30 yuan/ton, but actual transactions have not yet materialized; the East China Yangtze River Delta region has notified a price increase of 20 yuan/ton for cement and clinker, which is currently being implemented.

Zhuochuang Consulting analyst Hou Linlin believes that compared to previous seasonal price increases, the timing of this round of price increases has started earlier, and the regional differentiation is more pronounced. Traditionally, seasonal price increases often start in mid to late March to early April, coinciding with the full resumption of construction sites and a concentrated release of demand. This round of regional differentiation is also more notable, showing characteristics of rising in the north and falling in the south. In previous years, East China was the first to raise prices, leading to a nationwide response; this year, Northeast China was the first to increase prices, while East China, South China, and Southwest remained in a price decline. During Northeast China’s second round of price increases, East China began to rise, but South China’s downward trend has not stopped.

Li Kunming, an analyst at China Cement Network and the Cement Big Data Research Institute, stated that the East China region has generally raised cement and clinker prices by 20 yuan/ton, but the implementation effect is less than expected. Although market demand is marginally recovering, it remains at a low level, and the price increase process is gradually advancing, but it has not been fully realized.

Multiple factors resonate

Regarding the recent increase in cement prices, Li Kunming believes that this round of cement price increases is driven by three core factors: first, the weather improved after the Lantern Festival, workers officially returned to work, and downstream construction sites accelerated, leading to a marginal rebound in demand; second, cement prices have been declining throughout 2025, reaching near historical lows, and the industry’s willingness to raise prices is strong; third, coal prices remain relatively high, providing rigid support on the cost side.

“The main reason for this price increase is rising costs and coordinated price adjustments by leading enterprises,” Hou Linlin pointed out. Currently, actual demand recovery is slower than in previous years during the lunar calendar period, and northern clinker inventories are sufficient, which does not provide conditions for price increases. However, a significant rise in coal prices in February raised production costs, and coupled with cement prices nearing or even falling below cost lines before the holiday, corporate profit margins were further squeezed. As a result, mainstream enterprises in Northeast, North, and East China have increased self-discipline in halting production and have collaboratively pushed for price increases.

Baijian Construction Cement analyst Jiang Yuanlin noted that on the supply side, off-peak production during the heating season has led to a 21 percentage point average decrease in clinker inventories in Northeast China, Henan, and other regions, while regions like Zhejiang have implemented capacity self-discipline controls to actively reduce supply; on the cost side, the increase in oil prices in March has driven transportation costs for cement per ton up by 26-39 yuan, with rising energy and raw material costs forming support; on the demand side, the acceleration of resuming and starting infrastructure projects after the holiday has led to a more than 30% month-on-month increase in cement procurement for key projects, and improving demand has helped price transmission, while the appeal for corporate profit recovery has also become an important driving force.

Jiang Yuanlin emphasized that this price increase can only temporarily alleviate the industry’s low-price competition and profit pressure but cannot fundamentally resolve the supply-demand contradiction. In the short term, price adjustments directly expand corporate profit margins, with leading enterprises seeing more significant improvements. In the long term, the pattern of excess production capacity in the industry remains unchanged, with inventories in some southern regions exceeding the 60% warning line. If subsequent demand recovery does not meet expectations, it cannot be ruled out that enterprises will lower prices again to seize market share. Meanwhile, cost pressures remain, and small and medium-sized enterprises have weak cost transmission capabilities, and profit recovery is not as good as that of leading enterprises, which will further exacerbate industry differentiation.

Limited industry profit recovery

The reporter noted that although cement demand continues to weaken in 2025 and cement prices have declined, thanks to falling costs, the profits of some publicly listed companies in the cement industry have shown a certain degree of recovery.

Hua Xin 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 net profit growth is the decline in fuel costs and the company’s deepening various cost reduction and efficiency enhancement measures, which have led to a recovery in unit profitability of major products.

Ta Pai Group reported in a conference call on March 19 that in 2025, the company’s average sales cost of cement decreased more than the price decrease, leading to an improvement in the profitability of its main business, with a comprehensive gross profit margin increasing by 2.37 percentage points year-on-year.

Regarding the outlook for cement prices in 2026, Ta Pai Group stated that currently, prices have shown some loosening after the Spring Festival, with the Pearl River Delta market recently experiencing a significant adjustment of about 40 yuan/ton, slightly lower than the same period last year, mainly affected by the slow resumption of real estate work and the reform of value-added tax on concrete after the Spring Festival. Whether prices will increase in the future depends on the recent recovery of cement demand.

Jiang Yuanlin predicts that in 2026, cement prices will generally show a pattern of stability with an upward trend and 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 tight balance between supply and demand, while regions with sufficient production capacity like the Yangtze River Delta will mainly remain stable, with a low probability of significant increases. In terms of the supply-demand pattern, off-peak production and industry self-discipline will continue to exert pressure, with the capacity utilization rate remaining at a reasonable range of about 55%, and no large-scale supply release pressure; on the demand side, infrastructure investment will play a stabilizing role, and real estate demand is marginally improving but with limited recovery space, the overall decline in demand will further narrow, and the industry supply-demand will maintain a weak balance state, with profit levels expected to gradually recover to near the average of the past three years.

“In the second quarter, cement demand will seasonally improve compared to the first quarter, but there is still a significant gap compared to the same period last year; the phase-specific demand recovery will drive prices up but is unlikely to return to the same level as the first half of last year,” Li Kunming said. The current core contradiction in the industry remains the weak supply-demand pattern, and although capacity control has pushed clinker filing capacity below 1.7 billion tons, the decline in demand is even greater, and the supply-demand contradiction has only marginally eased, with no fundamental reversal.

(Edited by Zhang Xiaobo)

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