The China Cement Industry Association (CCIA) has warned that overinvestment in Sichuan province’s cement industry to meet a short-term rebuilding need following May’s 8.0 magnitude earthquake could lead to an oversupply of cement in the long term, the China Securities Journal reported.
According to a report by the association, demand for cement in the province is expected to hit 98.9Mt this year, 101.93Mt in 2009 and 90.6 million tons in 2010. However, local capacity will mean a 40Mta shortfall in cement, which has led to increased interest in investing in the sector. Additional capacity of 17.6Mt of cement is likely to be installed in the province by the end of this year, and Sichuan provincial economic and trade committee figures show more than 70 cement projects with a combined 90Mt of capacity are currently underway across the province.
Zhuang Chunlai, deputy director of the CCIA, said the province needs just 50 million tons of cement a year to meet the short-term shortage.