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

Recently, China’s domestic cement market has entered a period of phased price increases. Reporters with The Securities Times learned that, under the combined effect of multiple factors—including cost support, staggered production, and a marginal recovery in demand—the start time of this round of seasonal price hikes is earlier than in previous years, and it also shows a clear pattern of regional differentiation.

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

Cement prices are seeing increases

In 2025, due to continued downward pressure on real estate investment and a slowdown in infrastructure investment growth, domestic cement demand kept falling. Combined with intensifying market competition, cement prices declined throughout the year. According to CCA Digital Cement Network monitoring, in 2025 the national cement market’s average成交 price (PO42.5 bulk cement delivered price) was 367 yuan/ton, down 17 yuan/ton year over year, a decline of 4.4%.

In the first two months of 2026, the overall trend of cement prices is hard to be optimistic about. However, the situation has changed recently.

Recently, several listed cement companies have issued price-increase letters to the market. For example, Jinyu Jidong’s subsidiary Liaoning Jinyu Jidong Cement Trading Co., Ltd. published a price adjustment letter on March 14, stating that effective March 15, 2026 at 18:00, the company’s ex-works cement prices for all cement sold to the Jilin Province region would be increased by 40 yuan/ton.

On March 20, Huaxin Cement (Daye) Co., Ltd., a subsidiary of Huaxin Building Materials, issued a letter saying that effective March 21, 2026 at 18:00, the company will raise by 20 yuan/ton the prices for all types of bulk cement sold in the Hubei regions of Huangshi, Yangxin, Daye, and Ezhou.

Also on March 20, Daye Jinfeng Cement Co., Ltd., a subsidiary of Jinfeng Group, released a price adjustment notice stating that effective March 21, 2026 at 12:00, the company’s sales prices for bagged and bulk cement in the Wuhan region will be increased by 20 yuan/ton.

As of March 20, the Century Construction Net’s cement price index stood at 335 yuan/ton, up 4 yuan/ton from the beginning of March.

Wang Long, who runs a building materials business in Changchun, told reporters with The Securities Times that this was the first time since last year that he had received a cement manufacturer’s price-increase notice; the ex-works cement price was raised by 20 yuan/ton.

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

Data monitored by Zhuchuang Consulting show that from February 24 to March 20, major cement companies in the three northeastern provinces, Jin-Shan-Ji-Lu-Yu (Jin, Shanxi, Shandong, Henan), the eastern China Yangtze River Delta, the Sichuan-Chongqing area, and the Guanzhong region of Shaanxi successively raised prices. Among them, the three northeastern provinces completed two rounds of price increases; the notice-based cumulative increase was 90—100 yuan/ton, and the actual realized increase was 20—40 yuan/ton. Guanzhong Shaanxi and Jin-Shan-Ji-Lu-Yu regions announced price increases of 20—30 yuan/ton in mid-to-late March, and current actual transactions have not yet been realized. In the Yangtze River Delta, cement and clinker were notified to be increased by 20 yuan/ton, and implementation is basically in place.

Zhuchuang Consulting analyst Hou Linlin believes that compared with prior seasonal price hikes, the initiation time of this round of price increases is earlier and the regional differentiation is more pronounced. In previous years, traditional seasonal price hikes usually started from mid-to-late March to early April, alongside comprehensive site resumption and a concentrated release of demand. This round’s regional differentiation is also more evident, showing a pattern of “rising in the north and falling in the south.” In previous years, East China would be the first to raise prices and then drive a nationwide linkage; this year, the Northeast is the first to raise prices, while East China, South China, and Southwest China are still cutting prices. When the Northeast launched its second round of increases, East China began to rise, but South China’s downward trend did not stop.

Li Kunming, an analyst from China Cement Network · Cement Big Data Research Institute, said that in East China, cement and clinker were generally raised by 20 yuan/ton, but the realized delivery effects did not meet expectations. Although demand’s marginal recovery has occurred, the overall level is still low; the price-hike process is being advanced gradually, but it has not been fully兑现.

Multiple factors converging

Regarding the recent rise in cement prices, Li Kunming believes that this round’s cement price increase is driven by three core factors: first, after the Lantern Festival, the weather improved; workers officially returned to work; downstream construction sites accelerated; and demand rebounded at the margin. Second, after cement prices had been falling 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 remain relatively high, providing rigid cost support.

“The main reason for this round of price increases is cost rise combined 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 under the Lunar calendar. In the northern region, clinker inventories are sufficient, so the market itself does not have the conditions to push prices up. But in February, coal prices surged sharply, lifting production costs. At the same time, cement prices before the holiday approached and even fell below the cost line, further squeezing companies’ profit margins. As a result, leading mainstream enterprises in the Northeast, North China, and East China have increased self-discipline measures such as stopping kilns, and they are coordinating to push through price increases.

Jiang Yuanlin, an analyst at Century Construction, believes that on the supply side, staggered production during the heating season causes average clinker inventories in the Northeast and Henan to fall by 21 percentage points. Meanwhile, in regions such as Zhejiang, capacity self-discipline and management controls are being implemented to proactively reduce supply. On the cost side, in March, the rise in oil prices increased transportation costs for cement per ton by 26—39 yuan, and higher energy and raw-material costs provide support. On the demand side, after the holiday, the resumption and ramp-up of infrastructure projects quickened; purchases of cement for key projects increased month-on-month by more than 30%. The improvement in demand helps transmit price changes, 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 the pressure on profits; it cannot fundamentally resolve supply-demand contradictions. In the short term, the price adjustments directly expand companies’ profit space, with improvement more pronounced for leading companies. In the long term, the industry’s excess capacity pattern has not changed. In parts of southern regions, inventories have broken through the 60% warning line. If subsequent demand recovery does not meet expectations, companies may further cut prices again to抢份额. At the same time, cost pressure remains, and small and mid-sized companies’ ability to transmit costs is weaker; their profit recovery will lag behind that of leading companies, which will further intensify industry differentiation.

Limited profitability recovery in the industry

Reporters noted that although cement demand in 2025 continued to weaken and cement prices declined, some publicly listed cement companies’ profits experienced a certain degree of recovery, thanks to cost reductions.

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

In the March 19 teleconference, Ta Pai Group introduced that the decline in the company’s average cement sales cost in 2025 was greater than the decline in prices, so profitability of its core business improved year over year. Comprehensive gross margin increased by 2.37 percentage points year over year.

On the teleconference, when discussing its outlook for cement prices in 2026, Ta Pai Group said that, at present, post–Spring Festival prices have shown some loosening. The recent pullback in the Pearl River Delta market has been relatively large, about 40 yuan/ton—slightly lower than the same period last year—mainly due to slower post–Spring Festival real-estate project resumption and the reform of value-added tax on concrete. Whether there will be price hikes next depends on the recovery of cement demand in the near term.

Jiang Yuanlin predicts that in 2026, cement prices overall will show a pattern of stabilizing with an upward bias, with clear 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, in regions with tight supply-demand balance such as the Northeast and Northwest, there is room for increases. In regions with sufficient capacity such as the Yangtze River Delta, the main trend will be stable, and the probability of a sharp rise is low. In terms of supply-demand patterns, staggered production on the supply side and industry self-discipline will continue to gain momentum. Capacity utilization is expected to remain around a reasonable range of about 55%, with no pressure from large-scale supply releases. On the demand side, infrastructure investment will play a supporting role; marginal improvement in real-estate demand exists but the repair space is limited. Overall, the decline in demand will narrow further, and the industry’s supply-demand relationship will remain in a weak balance, with profitability expected to recover gradually toward the average level of the past three years.

“Second-quarter cement demand, quarter-over-quarter, will improve seasonally compared with the first quarter, but it will still be significantly different from the same period last year. Phased demand warming will push prices upward, but it will be difficult to return to the same period level of the first half of last year,” Li Kunming said. He noted that the industry’s core contradiction remains a weak supply-demand pattern. Although capacity control has pushed clinker registered capacity down to below 1.7 billion tons, the downward demand pressure is even greater; the supply-demand contradiction has only been marginally eased and has not been fundamentally reversed.