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Addressing China's Cement Glut

China’s cement industry is grappling with severe overcapacity, a legacy of its infrastructure boom where production continues to far exceed domestic demand. At its peak, the industry had an estimated capacity of over 2 billion tonnes per year accounting for about 55% of global production (HROne, 2025). This persistent glut has triggered destructive price competition, eroded producer profitability, and intensified environmental pressures, as cement manufacturing remains a major source of global CO₂ emissions.

 

The Chinese government has introduced a series of Supply-Side Structural Reform measures aimed at cutting inefficient and low-quality capacity. These include capacity swaps requiring outdated plants to be closed before new ones are built, stricter environmental regulations to phase out polluting facilities, and policies encouraging mergers and acquisitions to foster larger, more efficient enterprises.

 

‘China is also strengthening regulation of the cement sector to reduce oversupply and promote sustainable growth by maintaining production within approved limits. In a recent meeting, the Ministry of Industry and Information Technology reiterated its directive for producers to halt capacity expansion, regulate existing output, and close obsolete plants. These actions are expected to reduce annual clinker capacity by over 500 million metric tonnes, helping to restore market balance and enhance efficiency, environmental performance, and safety across the industry’ (China daily, 2025).

 

CEIC, 2025, China Cement Association, 2025, National Bureau of Statistics, 2025,  China Building Materials Federation, 2025, HROne, 2025, World Population Review, 2025





#Cement #China #Overcapacity #SupplyGlut #Construction #CO2 #Emissions #GreenCement #IndustrialPolicy #CarbonNeutral



 


 

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