Under the combined effect of dual factors, the performance of China's building materials industry in the first half of this year was better than expected at the beginning of the year, but overcapacity and declining profits still plague the traditional building materials products that account for an absolute proportion. The building materials industry urgently needs green transformation.

　　The trend of the building materials industry this year can be described as mixed with good and bad news. The good news is that the growth rate of traditional building materials products has relatively slowed, while high-tech, high-value-added new building materials such as cement products, technical glass, and lightweight building materials have maintained strong growth, showing positive signals of structural adjustment. The bad news is that sub-sectors of traditional building materials such as cement and glass are seriously overcapacity and urgently need to be curbed.

　　Under the combined effect of dual factors, the performance of China's building materials industry in the first half of this year was better than expected at the beginning of the year, but overcapacity and declining profits still plague the traditional building materials products that account for an absolute proportion. The building materials industry urgently needs green transformation.

　　15% growth rate guaranteed

　　Facing the situation of a significant decline in the production growth rate of the building materials industry last year, the Ministry of Industry and Information Technology issued an analysis report at the beginning of this year stating that the building materials industry will focus on transforming and upgrading traditional industries, cultivating and strengthening the inorganic non-metallic new materials industry, and vigorously developing producer services. The building materials industry will continue to maintain a steady and relatively fast development momentum, and it is expected that the industrial added value will grow by 12% year-on-year this year.

　　Half of 2013 has passed, and the trend of the building materials industry has revealed some positive signals.

　　Although the growth rate of traditional building materials products such as cement, flat glass, and ceramics has relatively slowed, sub-sectors such as concrete, cement products, technical glass, and lightweight building materials have maintained strong growth momentum, with a year-on-year increase of 30%. The year-on-year growth of the industrial added value of the building materials industry is higher than expected at the beginning of this year.

　　At the same time, among export products, building and sanitary ceramics, building stone, granite stone carvings, glass fiber and products, and other products saw a slight increase in export volume while product prices rose by more than 20%, and the industrial structure was further adjusted.

　　Industry experts analyze that China is currently in an important stage of industrialization and urbanization, and economic transformation and upgrading are in a critical period, with huge potential and space for development. Data from the National Bureau of Statistics show that since the beginning of this year, national fixed asset investment has still maintained a growth rate of more than 20%, especially investment in the secondary industry and the central and western regions, which have a significant driving effect on building materials, has maintained relatively fast growth.

　　Maintaining a reasonable investment scale and actively advancing the construction of urban roads, rail transit, environmental protection infrastructure, and other aspects are gradually releasing effective domestic demand. This will increase demand for building materials products to a certain extent, and the building materials industry is expected to gain business opportunities from it.

　　Experts predict that the building materials industry is still in a period of good development opportunities. Although there will no longer be large-scale growth, the overall development is good, and it is expected to enter a new development stage with steady speed and improved efficiency. It is expected that the operating environment of the building materials industry in 2013 will be relatively better than in 2012, and market demand is expected to increase. This year, building materials industries above designated size will still maintain a growth rate of about 15%, but the growth rate of traditional building materials industries will be lower than the average industrial growth rate and face greater downward pressure; the concrete and cement products industry, building stone processing industry, and lightweight building materials industry will maintain rapid growth of more than 20%.

　　Overcapacity intensifies

　　Although the trend in the first half of the year was barely satisfactory, "the overcapacity problem in the building materials industry is still worrying, and the key issue of transformation and upgrading has not yet been broken through," said Qiao Longde, president of the China Building Materials Federation.

　　Traditional building materials such as cement, glass, and building and sanitary ceramics are in a state of total overcapacity and severe overcapacity, and new capacity has not really been curbed. After 94 new production lines were added to cement in 2012, another 16 production lines were added in 2013; there are still 16 float glass production lines under construction. "Overcapacity has become a situation where construction continues while people shout about it, and the more people shout, the more overcapacity there is. This is the greatest harm to the industry's structural adjustment and economic operation," Qiao Longde said bluntly.

　　The heavy pressure of capacity has caused the efficiency level of traditional building materials to continuously decline, especially cement, glass, and building and sanitary ceramics, showing "increased volume without increased revenue, increased revenue without increased profit." Taking cement as an example, product output in the first quarter increased by 8.2% year-on-year, sales revenue increased by 6% year-on-year, but total profit fell by 52% year-on-year. The output and sales revenue of flat glass rose slightly, but if technical glass is not included, the entire industry is still loss-making.

　　Experts analyze that the contradiction between slowing effective demand and overcapacity interacts, and the situation of supply exceeding demand will not change in the short term; product homogenization competition remains fierce, vicious competition among enterprises has not yet been effectively resolved, and the establishment of a fair competition order still awaits further deepening of reform.