Xinjiang cement industry returns to profit

Xinjiang cement industry returns to profit
19 October 2017

The cement industry in Xinjiang province is faced with higher rates of overcapacity than any other part of China, making losses in three consecutive years. However, sector reform is expected to return the industry to profit, according to a government official.

Cement makers in Xinjiang have taken on a staged approach to operation, under which they stop production during the winter heating period and pick back up in the spring, which has played a positive role in reducing overcapacity.

In addition, the region ceased making 32.5-grade cement on 1 May 2017, leading to a rebound in market prices, an official told China Cement Association.

In the January-July 2016 period the Xinjiang industry reported a loss of CNY217m (US$32.8m) but is expected to turn a profit of CNY244m in 1H2017, ending the three-year run of losses.

Xinjiang government proposed to invest CNY1.5trn in infrastructure at the end of last year. However, 1H17 data suggest that the campaign has not been effective yet. The government expects this to change next year.

Published under Cement News