I. Current Status of Sichuan's Cement Industry

1.1 Output growth turns from positive to negative; growth of new clinker capacity slows down

　　Sichuan Province has long been a major province for cement industry development in Southwest China, accounting for half of the region's cement output. Nationally, Sichuan's cement output has remained stable at 4%~7% of the national total. Since 2010, Sichuan's cement output has ranked among the top four in the country, entering the ranks of major cement-producing provinces.

Figure 1: Sichuan's cement output accounts for half of Southwest China (10,000 tons)

Data source: National Bureau of Statistics, China Cement Research Institute

　　From 2009 to 2011, Sichuan's cement output growth experienced a major surge, reaching 46.31%, 49.51%, and 21.36% respectively, far exceeding the national growth rate. However, the good times did not last long. With the completion of post-disaster reconstruction and the weakening of the effects of the 4 trillion economic stimulus, output growth began to decline sharply, and in 2012, output even experienced negative growth.

Figure 2: Explosive growth in cement output from 2009 to 2011, negative growth in 2012

Data source: National Bureau of Statistics, China Cement Research Institute

　　Corresponding to the explosive growth in output was the rapid expansion of cement production capacity in Sichuan from 2009 to 2011, which was the "cement investment fever" in Sichuan that shocked the industry. The lack of scientific planning by local governments and blind investment attraction ultimately led to severe overcapacity. As overcapacity intensified, Sichuan began to gradually control the increment of new capacity starting in 2011, and the growth rate of new cement clinker capacity began to slow down year by year. New cement clinker capacity in Sichuan's cement industry dropped from 30 million tons in 2009-2010 to 10 million tons in 2012.

Figure 3: In the past two years, the growth rate of new cement clinker capacity in Sichuan has slowed down