Cement prices experience a phased increase with limited industry profit recovery

Securities Times reporter Sun Xianchao

Recently, the domestic cement market in China has seen a period of phased price increases. A Securities Times reporter learned through interviews that, under the combined impact of multiple factors—including cost support, production during scheduled off-peak periods, and a marginal recovery in demand—this round of seasonal price hikes has started earlier than in previous years and shows a clearly differentiated regional pattern.

Industry insiders expect that the concentrated release of infrastructure-construction demand in the second quarter may further open up upside space for prices. However, the core issue of overcapacity in the industry has not yet been fundamentally resolved, so the price recovery still has both phased and structural characteristics.

Cement prices begin to rise

In 2025, due to sustained weakness in real-estate investment and a slowdown in infrastructure investment growth dragging on the domestic cement demand, cement demand in China continued to decline. Combined with intensifying market competition, cement prices fell throughout the year. According to CCA Digital Cement Network monitoring, in 2025 the national cement market average transaction price (PO42.5 bulk cement landed price) was 367 yuan per ton, down 17 yuan per ton from the previous year, a decline of 4.4%.

In the first two months of 2026, the overall trend of cement prices is not exactly optimistic. However, the situation has changed recently.

Recently, several listed cement companies have issued price-increase letters to the market. For example, Jinyu Jidong Cement Trade Co., Ltd., a subsidiary of Jinyu Jidong, issued a price-adjustment letter on March 14. Starting from 18:00 on March 15, 2026, the company raised the ex-works price of all cement sold to the Jilin Province region by 40 yuan per ton.

On March 20, Huaxin Cement (Daye) Co., Ltd., under Huaxin Building Materials, sent a letter stating that starting from 18:00 on March 21, 2026, the company increased by 20 yuan per ton all varieties of bulk cement sold in the regions of Huangshi, Yangxin, Daye, and Ezhou.

On March 20 as well, Daye Jinfeng Cement Co., Ltd., a subsidiary of Jinfeng Group, also released a price-adjustment notice. Starting from 12:00 on March 21, 2026, the company increased the sales prices of bagged and bulk cement for the Wuhan region by 20 yuan per ton.

As of March 20, the cement price index reported by Baijian Construction Network was 335 yuan per ton, up 4 yuan per ton from the beginning of March.

Wang Long, who runs a building-materials business in Changchun, told a Securities Times reporter that since last year he has received for the first time a cement manufacturer’s notice of a price increase, with the ex-works price of cement raised by 20 yuan per ton.

A staff member of Yatai Building Materials’ sales company confirmed by phone that the company’s recent ex-works cement price has already been raised by 40 yuan per ton.

Data monitored by Zhuochuang Consulting shows that from February 24 to March 20, main cement enterprises in Northeast China, Jin-Ji-Yu-Lu-Yu, the East China Yangtze River Delta, the Sichuan-Chongqing area, and Shaanxi Guanzhong all raised prices one after another. Among them, the three northeastern provinces completed two rounds of price increases, with notifications累计 rising 90—100 yuan per ton and the actual landed increases of 20—40 yuan per ton; Shaanxi Guanzhong and Jin-Ji-Yu-Lu-Yu regions notified price increases of 20—30 yuan per ton in mid-to-early March, and actual transactions have not yet landed; in the East China Yangtze River Delta, cement and clinker companies notified price increases of 20 yuan per ton, which are basically already being implemented.

Zhuochuang Consulting analyst Hou Linlin believes that compared with seasonal price hikes in previous years, the start time of this round of price increases is earlier and the regional differentiation is more obvious. In past years, traditional seasonal price hikes usually started from mid-to-late March to early April, coinciding with construction sites resuming work comprehensively and demand being released in a concentrated manner. This round’s regional differentiation is also more pronounced, showing a pattern of “rising in the north and falling in the south.” In previous years, East China raised prices first and then drove nationwide linkages. This year, Northeast China raised prices first; meanwhile, East China, South China, and Southwest China are still cutting prices. When the Northeast enters its second round of increases, East China begins to rise, but South China’s downward trend has not stopped.

Li Kunming, an analyst at China Cement Network’s Cement Big Data Research Institute, said that in East China, cement and clinker are generally raised by 20 yuan per ton, but the landed effect has not met expectations. Although the market’s marginal demand has recovered, the overall level remains low; the price-hike process is advancing step by step and has not been fully realized.

Multiple factors converge

Regarding why cement prices have risen recently, Li Kunming believes this round of cement price increases is driven mainly by three aspects: first, after the Lantern Festival, the weather improves, workers return to their jobs in full, construction projects downstream speed up their operations, and marginal demand rebounds; second, since cement prices have fallen throughout 2025, they are already at relatively low levels in recent years, and the industry’s willingness to raise prices is strong; third, coal prices remain at a relatively high level, creating rigid cost support.

“The main drivers of this round of price hikes are cost increases and coordinated price adjustments by leading enterprises.” Hou Linlin pointed out that at present, actual demand is recovering more slowly than in previous years during the same period of the lunar calendar. In the North, clinker inventories are sufficient, and the market originally did not have conditions to push up prices. But coal prices surged sharply in February, lifting production costs. Combined with cement prices before the holiday approaching and even falling below the cost line, companies’ profit margins have been further squeezed. For this reason, mainstream enterprises in Northeast China, North China, and East China have stepped up self-discipline measures such as increasing kiln shutdowns during the off-peak period, and have coordinated to push through the price increases.

Jiang Yuanlin, a cement analyst at Baijian Construction, believes that on the supply side, off-peak production during the heating season has caused average clinker inventories in regions such as Northeast China and Henan to fall by 21 percentage points. In areas such as Zhejiang, capacity self-discipline and management are implemented to proactively reduce supply. On the cost side, the rise in oil prices in March increased per-ton cement transportation costs by 26—39 yuan, and higher energy and raw-material costs provide support. On the demand side, after the holiday, infrastructure projects resume work and accelerate, with procurement volumes of cement for key projects increasing by more than 30% month-on-month. The improvement in demand helps transmit prices, and companies’ desire to restore profitability is also an important driving force.

Jiang Yuanlin emphasized that this price increase can only temporarily ease the industry’s low-price competition and profit-pressure difficulties and cannot fundamentally resolve the supply-demand imbalance. In the short term, the price adjustments directly expand companies’ profit space, with improvements more pronounced for leading enterprises. In the long term, the industry’s overcapacity pattern remains unchanged, and in some southern regions inventories have broken through the 60% warning line. If subsequent demand recovery falls short of expectations, companies may once again cut prices to secure market share. At the same time, cost pressure will continue. Medium and small enterprises have weaker ability to pass through costs; their profit recovery may lag behind that of leading companies, which will further intensify industry differentiation.

Limited profit recovery in the industry

The reporter noted that although in 2025 cement demand continued to weaken and cement prices declined somewhat, some listed cement companies saw their profits recover to a certain extent thanks to cost decreases.

Huaxin Building Materials expects net profit of 27.0 billion to 29.5 billion yuan in 2025, a year-on-year increase of 11.6% to 21.9%. One of the reasons for the growth in net profit is lower fuel costs and the company’s deepening of various cost-reduction and efficiency-improvement measures; the unit profitability of its main products has recovered.

On a March 19 conference call, Ta牌 Group introduced that in 2025 the year-on-year decrease in the company’s average cement selling cost was greater than the decrease in prices, improving year-on-year profitability of its main business. Its consolidated gross margin rose by 2.37 percentage points year-on-year.

In the conference call, Ta牌 Group, when discussing its outlook for cement prices in 2026, said that currently, prices after the Spring Festival have loosened to some extent. In the Pearl River Delta market, prices have recently pulled back significantly, by about 40 yuan per ton, slightly lower than the same period last year, mainly due to slower real-estate re-starts after the Spring Festival and the impact of the reform of value-added tax for ready-mixed concrete. Whether there will be a price increase next will depend on the recovery of cement demand in the near term.

Jiang Yuanlin forecasts that in 2026, cement prices overall will trend toward steady increases with a differentiated regional pattern. In the second quarter, with the concentrated release of infrastructure demand, the national average cement price is expected to rise by 5%—8%. Among them, regions with tight supply-demand balance such as Northeast and Northwest China have room for increases. In regions with sufficient capacity such as the Yangtze River Delta, the trend will be more stable, with a lower probability of a sharp rise. On the supply-demand pattern, off-peak production on the supply side and industry self-discipline will continue to take effect. Capacity utilization will be maintained at around 55% within a reasonable range, with no pressure from a large-scale release of supply. On the demand side, infrastructure investment will play a supportive role; real-estate demand will improve at the margin, but the repair space is limited. Overall, the decline in demand will narrow further, and the industry’s supply-demand situation will remain a weak balance. Profit levels are expected to gradually recover toward the average of the past three years.

“Cement demand in the second quarter will improve seasonally quarter-on-quarter compared with the first quarter, but it will still show a clear gap versus the same period last year. The phased rebound in demand will drive prices upward, but it will be difficult to return to the same period level of the first half of last year.” Li Kunming said that the industry’s core contradiction is still a relatively weak supply-demand structure. Although controls on production capacity have reduced permitted clinker filing capacity to below 1.7 billion tons, the magnitude of the demand decline is even greater. As a result, the supply-demand contradiction has only been marginally eased and has not been fundamentally reversed.

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