Cement prices are experiencing a phased increase, with limited industry profit recovery

Recently, China’s domestic cement market has entered a phased price-increase cycle. A reporter from The Securities Times learned that, driven by a convergence of multiple factors—including cost support, staggered production schedules, and a marginal recovery in demand—this round of seasonal price hikes has started earlier than in previous years and is showing a clearly differentiated regional pattern.

Industry insiders expect that the concentrated release of infrastructure construction demand in the second quarter may further open up room for prices to rise. However, the core problem of overcapacity in the industry has not been fundamentally resolved, so price recovery still has both phase-specific and structural characteristics.

Cement Prices Climb

In 2025, due to the continued bottoming out of real estate investment and the slowdown in infrastructure investment growth, domestic cement demand continued to decline. Combined with intensified market competition, cement prices fell throughout the year. According to monitoring by CCA Digital Cement Network, in 2025 the national cement market’s average transaction price (PO42.5 bulk cement landing price) was 367 yuan per ton, down 17 yuan per ton year on year, a decline of 4.4%.

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

Recently, several listed cement companies’ subsidiaries have issued price-increase letters to the market. For example, Jinyu Jidong’s subsidiary Liaoning Jinyu Jidong Cement Trading Co., Ltd. issued a price adjustment letter on March 14. Effective from 18:00 on March 15, 2026, the company’s ex-factory prices for all cement sold to the Jilin Province region will be increased by 40 yuan per ton.

A letter issued by Huaxin Cement (Daye) Co., Ltd., a company under Huaxin Building Materials, on March 20 states that effective from 18:00 on March 21, 2026, the company will increase all varieties of bulk cement sold in the Huangshi, Yangxin, Daye, and Ezhou areas by 20 yuan per ton.

Hefeng Group’s subsidiary Daye Hefeng Cement Co., Ltd. also released a price adjustment notice on March 20. Effective from 12:00 on March 21, 2026, in the Wuhan region the sales prices of both bagged and bulk cement will be increased by 20 yuan per ton.

As of March 20, the cement price index on Century Construction Network was 335 yuan per ton, up 4 yuan per ton from early March.

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

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

Data from Zhuochuang Consulting show that from February 24 to March 20, major cement enterprises in China’s three northeastern provinces, Jin-Ji-Lu-Yu, the East China Yangtze River Delta, the Sichuan-Chongqing region, and the Guanzhong area of Shaanxi successively raised prices. Among the three northeastern provinces, two rounds of price increases were completed, with cumulative notice increases of 90—100 yuan per ton and actual landed increases of 20—40 yuan per ton. In the Guanzhong area and Jin-Ji-Lu-Yu regions, notices in mid-to-late March called for price hikes of 20—30 yuan per ton, but actual transactions have not yet fully landed. In the East China Yangtze River Delta, notices for cement and clinker increased prices by 20 yuan per ton, and implementation is basically in place.

Zhuochuang Consulting analyst Hou Linlin believes that compared with previous seasonal price increases, this round of price rises started earlier and shows more pronounced regional differentiation. In past years, traditional seasonal price hikes typically began from mid-to-late March to early April, along with full resumption of work at construction sites and a concentrated release of demand. This round’s regional differentiation is also more obvious, showing a pattern of higher prices in the north and lower in the south. In past years, the East China region raised prices first, then drove a nationwide linkage. This year, the northeast raised prices first; meanwhile, East China, South China, and Southwest China are still lowering prices. When the northeast completes its second round of increases, East China begins to rise, but the decline in South China does not stop.

Li Kunming, an analyst at China Cement Network’s Cement Big Data Research Institute, said that in East China, cement and clinker generally increased by 20 yuan per ton, but the landed effect fell short of expectations. Although demand has seen a marginal recovery, the overall level remains low; the price-hike process is progressing gradually, and it has not yet fully materialized.

Multiple Factors Moving in Tandem

Regarding the recent rise in cement prices, Li Kunming believes this round of cement price increases is driven by three core factors: first, after the Lantern Festival, the weather improved and workers officially returned to work; downstream construction sites started faster, and demand’s marginal recovery returned. Second, after cement prices fell throughout 2025, they are already at a low level in recent years, and the industry’s willingness to raise prices is strong. Third, coal prices have remained relatively high, forming a rigid cost-side support.

“ The main reason for this round of price increases is rising costs together with coordinated price adjustments by leading companies.” Hou Linlin said that currently, actual demand is recovering more slowly than in previous years for the same period of the lunar calendar. Clinker inventories in North China are sufficient, and the market originally did not have the conditions to push prices higher. But in February, coal prices rose sharply and lifted production costs. Combined with cement prices approaching and even falling below the cost line ahead of the holiday, profit margins were squeezed further. As a result, mainstream enterprises in the northeast, North China, and East China have increased self-discipline on kiln shutdowns, coordinating to drive up prices.

Jiang Yuanlin, an analyst at Century Construction Cement, said that on the supply side, staggered production during the heating season caused average clinker inventories in the northeast and Henan to fall by 21 percentage points, and regions such as Zhejiang implemented capacity self-discipline and control, actively reducing supply. On the cost side, an increase in oil prices in March raised per-ton cement transportation costs by 26—39 yuan; higher energy and raw material costs provided support. On the demand side, following the holiday, infrastructure projects accelerated their starts and resumption, and the volume of cement procurement for key projects rose by more than 30% quarter-on-quarter. The improvement in demand helps transmit price increases, 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; it cannot fundamentally resolve supply-demand contradictions. In the short term, the price adjustment directly expands companies’ profit space, with head companies seeing more significant improvement. In the long term, the industry’s overcapacity pattern remains unchanged, and in some southern regions inventories have surpassed the 60% warning line. If future demand recovery falls short of expectations, companies may again cut prices to抢 market share. At the same time, cost pressure will continue. Smaller and mid-sized companies have weaker abilities to transmit costs, so profit recovery will lag behind that of leading firms, further intensifying industry differentiation.

Limited Profit Recovery in the Industry

The reporter noted that although cement demand in 2025 continued to weaken and cement prices declined, some listed cement companies’ profits saw a certain degree of recovery, thanks to lower costs.

Huaxin Building Materials expects net profit of 2.70 billion yuan to 2.95 billion yuan in 2025, a year-on-year increase of 11.6% to 21.9%. One of the reasons for net profit growth is lower fuel costs and the company’s further deepening of measures to reduce costs and improve efficiency; unit profitability for the company’s main products has recovered.

In a conference call held by Taipai Group on March 19, the company said that in 2025 the decline in the company’s average cement selling cost was greater than the decline in price, improving year-on-year profitability in its core business. Comprehensive gross margin rose by 2.37 percentage points year on year.

At the conference call, when discussing its outlook for cement prices in 2026, Taipai Group said that currently, prices after the Spring Festival have loosened somewhat. In the Pearl River Delta market, recent pullbacks have been relatively large—about 40 yuan per ton, slightly lower than the same period last year—mainly due to slower real estate resumption after the Spring Festival and the impact of the VAT reform for ready-mixed concrete. Whether prices will rise next depends on the recovery of cement demand in the near term.

Jiang Yuanlin predicted that in 2026 cement prices overall will show a pattern of stability with an upward bias, with regional differentiation. In the second quarter, as infrastructure demand is released in a concentrated manner, the national average cement price is expected to rise by 5%—8%. Among them, areas with tight supply-demand balance such as the northeast and northwest have room for price increases; in regions with sufficient capacity such as the Yangtze River Delta, prices will mainly remain stable, and the probability of a big jump is low. On the supply-demand structure, on the supply side, staggered production and industry self-discipline will continue to work; capacity utilization will be maintained in a reasonable range around 55%, with no pressure from a large-scale release of supply. On the demand side, infrastructure investment will play a supportive role; marginal improvement in real estate demand is limited in terms of recovery space. Overall, the decline in demand will narrow further, and supply-demand in the industry will remain in a weakly balanced state. Profit levels are expected to gradually recover toward the average of the past three years.

“Second-quarter cement demand will improve seasonally quarter-on-quarter compared with the first quarter, but there is still a clear gap versus the same period last year. The phased recovery in demand will push prices upward, but it will be difficult to return to the same period in the first half of last year.” Li Kunming said that the industry’s core contradiction remains that supply-demand conditions are still weak. Although capacity control measures have reduced clinker备案 capacity to below 1.7 billion tons, the scale of the demand decline is larger, so supply-demand contradictions are only marginally alleviated and have not fundamentally been reversed.