Abstract: Event 1: Several departments of the State Council jointly launched a special inspection campaign to phase out outdated production capacity in the cement and glass industries. Event 2: The China National Cement Association established a leading group for capacity reduction and put forward policy recommendations for a capacity-reduction action plan. Event 3: Cement prices continued to rebound, and the industry’s profitability significantly improved. Event 4: Hailuo Cement was listed for the first time on the World’s Top Six Cement Companies ranking, placing second globally. Event 5: China National Building Materials Group has been ranked among the Fortune Global 500 for seven consecutive years...

Event 1: Several departments of the State Council jointly launch a special inspection to phase out outdated production capacity in the cement and glass industries.

In February 2017, in accordance with the “Special Inspection Plan for Eliminating Outdated Production Capacity in the Cement and Glass Industries” approved by the State Council (hereinafter referred to as the “Inspection Plan”), the Ministry of Environmental Protection and the General Administration of Quality Supervision, in collaboration with the National Development and Reform Commission, the Ministry of Industry and Information Technology, and the State Administration of Work Safety, formed eight inspection teams that traveled to 31 provinces (autonomous regions and municipalities) and the Xinjiang Production and Construction Corps to carry out a special inspection on the elimination of outdated production capacity in the cement and glass industries. The China National Cement Association, together with cement associations from various provinces and autonomous regions, dispatched nearly 20 experts to assist government departments in conducting the special inspection. In August 2017, the Ministry of Environmental Protection and four other ministries jointly issued the “Notice on the Results of the Special Inspection for Eliminating Outdated Production Capacity in the Cement and Glass Industries.” During the inspection period, a total of 224 cement enterprises were inspected on-site. The inspection revealed that there were still 19 cement clinker enterprises nationwide using outdated technologies and equipment explicitly banned by the state, with a combined capacity of 4.33 million tons; and 70 cement grinding enterprises, with a total capacity of 20.587 million tons.

The Notice requires all localities to take serious measures to address issues such as inadequate implementation of the elimination of outdated production capacity and illegal or non-compliant production activities by enterprises. It calls for resolute crackdowns on enterprises engaged in illegal or non-compliant production and construction, as well as those failing to meet environmental protection, quality, and safety standards. Localities found lacking in their efforts will be held strictly accountable. Supervision and follow-up inspections should be strengthened, and information related to capacity reduction should be promptly released. A sound whistleblowing system should be established to prevent fraud and falsification in the process of eliminating outdated production capacity.

  Event 2: The China National Cement Association established a leading group for capacity reduction and put forward policy recommendations for a capacity-reduction action plan. 　

To implement the spirit of the General Office of the State Council’s “Guiding Opinions on Promoting Stable Growth, Structural Adjustment, and Enhanced Efficiency in the Building Materials Industry” (Guobanfa [2016] No. 34), and to achieve the goals set forth in the 13th Five-Year Plan for the cement industry—namely, capacity reduction, structural adjustment, stable growth, and enhanced efficiency—the China Cement Association, in accordance with the resolution adopted at the 2017 C12+3 Summit, established a Leading Group for Capacity Reduction in the Cement Industry. On July 26, the Association convened the “2017 Conference on Promoting Capacity Reduction, Strengthening Self-Discipline, and Enhancing Efficiency in the Cement Industry” in Wuhu, Anhui Province. At the conference, the Industry Capacity Reduction Leading Group released the “Action Plan for Capacity Reduction in the Cement Industry (2017-2020)” (a draft policy proposal), along with several related supporting policy proposals, including “Measures for Special Inspections and Handling of Non-Compliant Construction Projects,” “Suggestions on Establishing a Special Fund to Pilot Market-Based Capacity Reduction Innovations,” “Suggestions on Establishing a Traceability System for Cement Product Quality and Accelerating the Elimination of Outdated Cement Grinding Capacity,” and the “China Cement Association’s Self-Discipline Guidelines on Market Pricing Behavior.” Subsequently, the China Cement Association, together with local cement associations, successively organized workshops on capacity reduction efforts in various regions, including the Pan-Northeast Region, Shandong Province, the Western Region, and the Jinji-Lu-Yu Area. The Association also visited several major enterprises, extensively solicited feedback from cement companies, and continuously revised and refined the content of the capacity reduction policy proposals.

In December 2017, the Leading Group for Capacity Reduction in the Industry requested that the China National Cement Association formally submit to the relevant government authorities its policy proposal titled “Action Plan for Capacity Reduction in the Cement Industry (2018–2020).” At the same time, the Association distributed the “Action Plan” to all provincial-level cement associations, hoping that each provincial (and municipal) association would submit proposals for implementation plans for capacity reduction to the local government authorities. Under the leadership of the local authorities, these implementation plans should be promptly put into practice and organized effectively.

Event 3: Cement prices continue to rebound, and the industry’s profitability has significantly improved.

In 2017, the national cement market prices showed a sustained upward trend, particularly gaining strong momentum after entering the peak season in August. The primary factors driving this price increase include the continued rise in upstream manufacturing prices, which have led to a corresponding rise in midstream cement prices; secondly, the soaring costs of raw and fuel materials as well as substantial investments in environmental protection measures; and thirdly, the temporary shutdown of kilns, mills, and production facilities in some regions during environmental inspections, exacerbating the imbalance between supply and demand. Based on an analysis and comparison of historical cement price trends, changes in market demand, actual transaction prices, and the rate of increase in steel and coal prices, current cement prices remain within a reasonable range.

According to monitoring by the Association’s Digital Cement Network, the average national market price of cement rose from 327 yuan per ton in February at the beginning of the year to 409 yuan per ton in December (excluding Tibet), representing a 25% increase over the year-end compared to the beginning of the year. By December, cement prices (P.O 42.5 bulk) in two-thirds of China’s provinces had exceeded 400 yuan per ton, with prices in six major markets reaching above 500 yuan per ton. With prices continuing to rise and demand experiencing slight fluctuations, the industry’s profitability has shown marked improvement. In the first 10 months of 2017, the industry’s cumulative total profits amounted to approximately 67 billion yuan, an increase of 117% year-on-year, marking the second-highest level on record for the same period.

Event 4: Hailuo Cement is listed for the first time on the World Top Six Cement Companies ranking, placing second globally.

　　In August 2017, in the 2016 Global Top Six Cement Companies list published by the International Cement Review (ICR), China National Building Materials Group ranked second worldwide—a milestone that marked the first time a Chinese cement company had made it onto this prestigious list. The No. 1 spot was occupied by LafargeHolcim, a French-Swiss company, while Heidelberg of Germany came in third. Following them were Cemex from Mexico, Ultra-Tech from India, and CRH from Ireland, in that order.

Hailuo Cement has ranked second on the World’s Top Six Cement Companies list, demonstrating that its outstanding achievements over the past nearly 30 years have earned high recognition and acclaim from the international cement industry. This also signifies that Chinese cement companies are steadily increasing their global influence.

Event 5: China National Building Materials Group has been listed among the Fortune Global 500 for seven consecutive years. 　　

In 2017, the Fortune Global 500 list was released. China National Building Materials Group made the list for the seventh consecutive year, with revenue of $39.323 billion, ranking 259th—just behind France’s Saint-Gobain Group—and continuing to hold the second position among global building materials companies. Other building materials companies also making the list include Ireland’s CRH at No. 363 and LafargeHolcim at No. 398.

In 2016, following the restructuring of the “Two Materials,” China National Building Materials Group’s total assets had reached over 560 billion yuan. With a total cement production capacity of 530 million tons, the group has become the world’s largest cement producer. Integrating research and development, manufacturing, and distribution, it is also China’s largest and one of the world’s leading comprehensive building materials industry groups. In December 2017, the inaugural General Assembly of the World Cement Association, hosted by the World Cement Association, was held in London, UK. The assembly was attended by representatives from 33 countries and 59 founding cement companies, which elected the Executive Committee, Director, and Chairman of the World Cement Association. Song Zhiping, Chairman of China National Building Materials Group, was unanimously elected as the founding Chairman of the World Cement Association—a first for China in the large-scale, foundational industrial sector to be elected unanimously as the chairman of a world-class industry association.

Event 6: Twelve cement companies have been awarded the first batch of national-level Green Factory titles. 　　

In August 2017, the Ministry of Industry and Information Technology issued the “Notice on the Publication of the First Batch of Green Manufacturing Demonstration Enterprises for 2017.” A total of 201 enterprises nationwide were included in the Green Factory List. As the leading industry in the building materials sector and a key focus of supply-side structural reform, the cement industry saw 12 enterprises (factories) awarded the title of National-Level Green Factory in the first batch, including: Hebei Jinyu Dingxin Cement Co., Ltd., Guangling Jinyu Cement Co., Ltd., Handan Jinyu Taihang Cement Co., Ltd., Jilin Yatai Cement Co., Ltd., Anhui Wuhu Conch Cement Co., Ltd., Anhui Dijiang Conch Cement Co., Ltd., Fujian Sanming Southern Cement Co., Ltd., Jiangxi Yudu Southern Wannianqing Cement Co., Ltd., Shandong Zaozhuang Zhonglian Cement Co., Ltd., China Resources Cement (Nanning) Co., Ltd., China Resources Cement (Tianyang) Co., Ltd., and Sichuan Esheng Cement Group Co., Ltd.

Event 7: Cement enterprises in the 2+26 cities will continue to fully implement staggered production during the heating season.

Starting from the pilot program launched in Hebei Province in January 2016, by 2017 the central environmental inspection had conducted four rounds of inspections, achieving full coverage of all 31 provinces across the country. In March 2017, the Ministry of Environmental Protection, the National Development and Reform Commission, the Ministry of Finance, the National Energy Administration, and the governments of six provinces and municipalities—Beijing, Tianjin, Hebei, Shanxi, Shandong, and Henan—jointly issued the “Work Plan for Air Pollution Prevention and Control in the Beijing-Tianjin-Hebei Region and Surrounding Areas in 2017,” stepping up efforts to tackle air pollution in these regions. The plan requires that during the heating season, the cement industry in the 2+26 cities of the Beijing-Tianjin-Hebei region and its surrounding areas continue to implement staggered production schedules in full. In November, the Ministry of Industry and Information Technology and the Ministry of Environmental Protection issued the “Notice on Implementing Staggered Production in Certain Industrial Sectors of the 2+26 Cities during the Autumn and Winter Seasons of 2017–2018,” stipulating that the cement industry (including special cements but excluding grinding stations) shall carry out staggered production during the heating season in accordance with the relevant provisions of the “Notice by the Ministry of Industry and Information Technology and the Ministry of Environmental Protection on Further Strengthening Staggered Cement Production” (MIIT Lian Yuan [2016] No. 351). Facilities undertaking tasks essential to people’s livelihoods, such as providing residential heating or jointly handling urban waste or hazardous waste, may be exempted from fully implementing staggered production; however, their maximum allowable production capacity must be determined based on the actual volume of tasks they are responsible for. During periods of severe pollution alerts, cement grinding stations must suspend operations entirely.

Event 8: Xinjiang Takes the Lead in Ceasing Production of 32.5-Grade Cement 　

As an important measure to reduce overcapacity, the removal of 32.5-grade cement has long been widely advocated within the industry. In 2017, this effort made substantial progress: starting in May, Xinjiang took the lead in completely halting the production of 32.5-grade cement. At the same time, the Ministry of Industry and Information Technology announced the public notice for the approval of amendments to national standards, comprehensively phasing out 32.5R composite silicate cement.

　　According to the requirements of the Xinjiang Uygur Autonomous Region Government’s “Notice on Forwarding the Implementation Plan for Stabilizing Growth, Adjusting Structure, and Enhancing Efficiency in Xinjiang’s Cement Industry,” Xinjiang began implementing the complete elimination of 32.5-grade cement on May 1, 2017. Based on the implementation results, with the exception of limited use in rural markets, 32.5-grade general-purpose silicate cement has been completely phased out in construction projects, and the implementation has achieved positive outcomes. According to estimates, the elimination of 32.5-grade cement has effectively reduced production capacity by 5 million tons, thereby alleviating, to some extent, the imbalance between supply and demand in the market. Following the removal of 32.5-grade cement, cement prices have gradually rebounded significantly, and the industry’s profitability has markedly improved. This move has also standardized the types and proportions of blended materials used at grinding stations, playing a positive role in curbing the vicious competition in the cement market.

　　In September 2017, the Ministry of Industry and Information Technology published a notice soliciting comments on the draft amendment to the mandatory national standard "General Portland Cement." The main revision to the mandatory national standard "General Portland Cement" stipulates that "6.4 The strength grades of composite Portland cement are divided into four levels: 42.5, 42.5R, 52.5, and 52.5R," effectively abolishing the 32.5R strength grade for composite Portland cement.

Event 9: The association promotes a pilot program for innovative efforts to reduce cement overcapacity. 　

To accelerate the advancement of supply-side structural reform in the cement industry, promote stable growth, adjust structure, and enhance efficiency in the sector, resolve the contradiction arising from overcapacity in cement production, and foster the healthy development and transformation and upgrading of the cement industry, the China Cement Association has selected Zibo Lianhe Cement Co., Ltd. and Liaoning Yunding Cement Co., Ltd. as pilot enterprises for capacity-reduction innovation. The Association has designed innovative pilot plans for these two companies aimed at intensifying regional market integration, optimizing industrial layout and resource allocation, establishing an effective market-oriented mechanism for capacity reduction, and advancing the implementation of the capacity-reduction targets and tasks outlined in Document No. 34 (2016) issued by the General Office of the State Council.

　　In February 2017, the nation’s first cement management company—the Zibo Lianhe Cement Enterprise Management Co., Ltd.—was officially established in Zichuan, Zibo. The company was jointly founded by the Zichuan District Public Asset Management Company together with seven cement enterprises, including Shandong Energy Zibo Mining Group Donghua Cement Company, Shanshui Group, Shan Aluminum Cement, Baoshan Cement, Luzhong Cement, Chongzheng Cement, and Linqu Shanshui. With the support of the local government, the company has boldly explored a new model for transforming old growth drivers into new ones by establishing an industry platform, optimizing resource allocation, and promoting structural adjustments within the cement industry. Dedicated special funds have been allocated to establish an effective market-oriented mechanism for capacity reduction, thereby enhancing the economic efficiency of both individual enterprises and the industry as a whole.

　　In August 2017, in accordance with the requirements of Document No. 101 [2016] issued by the Liaoning Provincial Government Office, Liaoning Yunding Cement Group Co., Ltd.—a mixed-ownership enterprise spontaneously established by several large cement companies within Liaoning Province—was founded. The establishment of this company was aimed at implementing the spirit of Document No. 34 [2016] issued by the General Office of the State Council. Given the severe overcapacity in Liaoning’s cement industry, chaotic market competition, and persistent losses across the entire sector, the company was set up to enhance industrial concentration and explore the development of a market-oriented mechanism for capacity reduction.

Event 10: Organize a skills competition in the cement industry to foster the spirit of “national master craftsmen.”

On November 21, 2017, the 2017 “Shan Shui Cup” National Building Materials Industry Vocational Skills Competition—Cement Central Control Room Operator (Cement Kiln) Vocational Skills Competition, hosted by the China Cement Association, kicked off at the Jinyu Technology School in Beijing. Nearly 300 cement enterprise central control room operators from across the country participated in this competition.

　　This competition is a national-level Category II competition jointly organized and applied for by the China Cement Association and the China Machinery, Metallurgy, Building Materials Trade Union. A national-level Category II competition represents the highest level of professional skills competition within the industry and is the premier award program offered by the state to frontline technical workers. In this competition, the existing industry-specific skill contests have been integrated with the Ministry of Human Resources and Social Security’s “National Industry Vocational Skills Competition,” thereby enhancing the recognition and prestige of the competition platform. This can be regarded as a significant step forward and development in cement industry skills competitions. The competition provides cement industry workers with an extensive industry-wide platform where participants can learn, exchange ideas, and improve their skills. The emergence of highly skilled technicians and model workers during the competition will undoubtedly inspire a broader range of industry workers to actively pursue skill development and enhance their capabilities. The competition also opens up smooth pathways for cement industry workers to grow and succeed; promotes the refinement of mechanisms for cultivating, employing, and incentivizing technical workers; continuously expands career development opportunities for technical workers; and helps nurture and cultivate more “national master craftsmen” in the cement industry.