Zhongtai Securities says China’s cement sector is at a short-term profitability
trough as demand is weakened by slower new property starts; sector capacity
utilization fell below 50% in 2025. Supply-side players are accelerating
replacement capacity to meet production targets and prepare to run at design
capacity. The sector posted 2025 net profit of 29.0 bln yuan (vs 26.0 bln yuan
in 2024) but prices and margins softened again in 2026 Q1; insufficient demand
and weak enforcement of staggered production in core markets such as the Yangtze
River Delta and Hubei have kept prices rangebound at low levels. Market leaders
are diverging: Anhui Conch’s share rose to 15.65% (from 12.79% in 2021–25),
while Huaxin, supported by overseas business, was the only firm to register
revenue and pre-impairment net-profit growth in 2025 and 2026 Q1. Outlook:
Zhongtai sees current profitability at the bottom and strong industry intent to
raise prices, with a likely low-to-high price/profit trend this year; longer
term, production curbs and China’s dual‑carbon constraints should accelerate
supply clearance and materially improve sector margins as supply and demand
rebalance.
