Hebei Air Pollution Appears Again: Shifting Peaks In The Game Of Cement Industry

The strict control of air pollution makes Tangshan cement enterprises stop production again after 2018.

On February 18, the office of the leading group for air pollution prevention and control of Tangshan City issued a notice saying that except for the cement enterprises which guarantee residents' heating and undertake sludge disposal to produce according to the minimum production load, the rest will stop production. According to the above notice, according to the prediction of relevant departments of the Ministry and province, since February 20, the diffusion conditions in Tangshan City have continued to deteriorate, the air quality has deteriorated, and severe pollution has been achieved in some periods.

"In 2018, Tangshan city also called off the production of cement enterprises for the same reason as this incident, and its starting point was environmental protection. Production restriction is to limit clinker production. During this period, we can process clinker instead of producing clinker. " On February 22, the relevant person in charge of Jidong Cement said in an interview with the reporter of the 21st century economic report that the cement production will keep enough stock, about 50% in the peak season and about 70% in the early spring. Therefore, the introduction of the production restriction policy has not had a great impact on the company.

On February 23, Zheng Jianhui, chief researcher of Cement Research Institute of China cement network, also agreed with the above views in an interview with the 21st century economic report. "In terms of environmental protection policy, the impact on the cement industry is not obvious, because in the short term, the north is currently in the peak production stage, so enterprises are not affected by the policy. In the long run, such a policy will reduce the pressure on air quality, which will be good for Beijing Tianjin Hebei region, including the Yangtze River Delta in the future. "

Environmental protection under pressure

In December 2020, the central economic work conference pointed out that one of the eight major tasks of 2021 is to do a good job in carbon peaking and carbon neutralization, and it is required to work out an action plan to reach the peak of carbon emissions before 2030, and support the localities with conditions to take the lead in reaching the peak. It is pointed out that China's carbon dioxide emission will reach its peak before 2030 and realize carbon neutralization before 2060.

In fact, since the end of last year, there has been a lot of pressure on environmental protection and emission reduction across the country. On January 21, 2021, Sichuan, Hubei, Anhui, Jiangsu and other provinces and cities successively issued severe pollution weather warning, and the number of heavy pollution weather warning cities increased to more than 50. According to the weather conditions, Linfen, Shanxi Province, has upgraded the level II emergency response to level I since 16:00 on January 21 in 6 counties (cities and districts), Guxian county and Linfen Economic Development Zone along the Fenhe River, and initiated level I emergency response in Yicheng, Fushan and Anze counties.

"In fact, the carbon dioxide emission of cement is relatively large, but the current policy has not really focused on carbon reduction in the cement industry. It is estimated that relevant policies will be introduced this year to help the transformation and upgrading of the cement industry." Zheng Jianhui explained to reporters.

According to the reporter of the 21st century economic report, the Ministry of industry and information technology will implement industrial low-carbon action and green manufacturing project this year, and formulate the action plan and roadmap for carbon peak in steel, cement and other key industries.

However, there is still a process of implementation of the policy. The progress of environmental protection in each province is inconsistent, and the investment of enterprises in environmental protection will not be achieved overnight.

Zheng Jianhui said: "from the technical level, technology has a mature process, and enterprises will do some wait and see. From the perspective of policy, although the general direction of the country is the same, the rhythm of the implementation of policies in different provinces is different, some provinces are more strict and some are more relaxed. For example, in the central and western regions of China, in the development period, the requirements for environmental protection are not as strict as those in East China, which requires a certain time buffer. "

In the view of the above person in charge of Jidong Cement, the current implementation of the policy of environmental protection and production restriction in winter is not "one size fits all", and enterprises that meet the environmental quality standards can still carry out production.

However, with the improvement of environmental protection standards, the access threshold of cement industry must be raised. According to Wei Yu, an industry researcher at the Cement Research Institute of China cement network, the investment in environmental protection for a 4500 ton production line is about 100 million yuan. Therefore, for small enterprises, with the increase of costs, there is still a certain survival pressure.

Considering the survival pressure of enterprises, China is guiding cement enterprises to restructure, which may bring new vitality to small enterprises. Zheng Jianhui said: "the capacity replacement policy for the cement industry to implement the reduction plan, the amount of replacement can be less and less, the competitiveness is relatively small, for example, enterprises reaching the target of 2500 tons / day cement clinker production line can choose to exit, and then sell to large enterprises for replacement, which is also a measure to improve the concentration and improve the whole merger and reorganization."

Cement market may be earlier than previous years

Recently, provinces and cities have accelerated the announcement of key construction investment plans in 2021. According to the data of Galaxy Securities Research Institute, infrastructure investment (excluding power) in 2020 will increase by 0.9% year-on-year, and the pulling effect of government special debt investment on infrastructure investment is expected to be implemented in 2021. Recently, many provinces and cities have released investment plans for 2021, such as Beijing Development and Reform Commission announced the total investment of "three 100" key projects exceeding 1.3 trillion yuan, Henan Province announced 1371 key construction projects with a total investment of more than 4.4 trillion yuan, and the first batch of 461 key construction projects issued by Jiangxi Provincial Development and Reform Commission, with a total investment of 1.5 trillion yuan. It is estimated that the national infrastructure investment growth rate is expected to reach more than 3% in 2021.

The gradual release of demand side makes the market expect the cement market in 2021. According to the monitoring data of China cement network, on February 19, some cement enterprises in Tongling District of Anhui Province tried to raise the clinker price by 30 yuan / ton, and some cement enterprises in Shijiazhuang area of Hebei Province also raised the cement price by 10 yuan / ton. On February 7, some cement enterprises in Chongqing area raised the cement price by 50 yuan / ton.

"The clinker price is rising month on month, which is not as high as last year. January and February are the traditional off-season, because many factories are in the north and the weather is cold, and the local shutdown." Jidong Cement said the above responsible person explained.

Wang Ting, a researcher at China Galaxy Securities Research Institute, analyzed the current wave of market: "the first quarter belongs to the traditional off-season of the cement industry, and the price is generally relatively stable. The reasons for the price rise in advance this year are: in January, due to the coming of the Spring Festival, the cement price dropped by a large margin, with a month on month decrease of 2.38%, and a year-on-year decrease of 7.25%; Second, due to the rapid warming of the weather and the local new year's policy, some construction sites were still under construction during the Spring Festival, which boosted the cement demand. In 2020, due to the impact of Xinguan epidemic situation and southern flood, the average factory price of cement in China will drop by 4.4% year on year. It is estimated that in 2021, with the alleviation of the epidemic situation, the cement industry is expected to improve, and the cement price is expected to increase in the whole year. "

In Wang Ting's opinion, the cement price increase has just started, and the cement price will continue to rise with the arrival of the peak season.

?