COVID-19: Voices from the Cement Industry - Interview with Wu Bin

As part of our programme of connecting our global members during the COVID-19 outbreak, WCA is hosting video interviews with our members to discuss the situations in their countries and to find out more about the impacts of the pandemic on the cement industry around the world. Here is an interview with Mr Wu Bin, CEO of Anhui Conch, China and WCA Board Member.

Video Transcript

[What impact has COVID had on China's cement industry? What are is the likely long-term impact?]

Due to the pandemic situation, market demand in 2020 Q1 fell by about 30%. In April, market demand recovered and Chinese cement production increased by 3.8% year-on-year. It is expected that China's cement demand will remain in a reasonable range for the next 2-3 years.

 

[COVID has been effectively controlled in China, but it is still spreading abroad. From your point of view, how will this affect the international market?]

Speaking about China or the whole world, the cement industry has overcapacity and the industry have challenges as well as opportunities. Conch operates cement plants in Indonesia, Myanmar, Laos and Cambodia, therefore we are highly concerned about the Covid-19 pandemic situation overseas. The impact of COVID-19 on the world cement industry will certainly be larger than in China, as in Europe, Latin America and Southeast Asia the virus countermeasures have yet to be effective.

 

[China's imports of clinker have increased significantly, what do you think caused this?]

Affected by Covid-19, demand has declined in South East Asia and domestic prices are very low. This widened the price gap between the South East Asian and the Chinese market, which gives an export opportunity to SE Asian countries, alongside the large decline in international oil prices which has reduced ocean transportation costs. Therefore, China has already become the largest importer of clinker.

This situation will remain for some time mainly due to two factors. China's coastal areas such as Zhejiang, Fujian and Shandong are short of limestone resources, but demand is high. Compared with sourcing from Northeast China or the upper Yangtze river, imported cement has a clear price advantage. This gives imports an opportunity at present

 

[How can the cement industry have stable growth and high-quality development in future?]

The more difficult the situation is, the more we need to pull together and promote sustainable and healthy development of the industry. Firstly, no country can cope with COVID alone, therefore we need to work together to fight against Covid-19 pandemic. Secondly, it is necessary to strengthen market confidence and maintain the hard-earned business environment and thus lay a foundation for the high-quality development of the industry

Thirdly, whether we talk about the world or just China, efforts to cut overcapacity and phase out old, inefficient technology should be strengthened, because the scale of overcapacity is very serious now and too much old technology is still in operation. Fourthly, we need to unify our thinking and limit new capacity. We should keep capacity in a reasonable range, strictly implement capacity reduction and replacement policies, and prohibit new capacity by exploiting loopholes of policies.