Although practitioners have been calling for overcapacity, new projects continue to be built, and the trend of overcapacity continues.

As is well known, the phenomenon of overcapacity in the cement industry has existed for a long time.

For many years, staggered production has become an important means for cement enterprises to reduce production costs and avoid falling into vicious competition at low prices.

The contradiction between supply and demand is becoming increasingly prominent, and the crisis of overcapacity in the sand and gravel aggregate industry is imminent.

In the next 2-3 years, the mining rights production capacity that has already been acquired will be released as soon as possible
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As of now, China Power Construction Corporation has held 23 sand and stone mining rights, and 7 green sand and stone projects have entered the operation period.

From the perspective of mining rights transfer, in 2022, a total of 959 sand and gravel mining rights were successfully transferred nationwide, involving a total of approximately 39.534 billion tons of approved reserves.

The speed of new production capacity exceeded people’s expectations.

From the perspective of the release of production capacity by large enterprises, many enterprises believe that the sand and gravel industry is on a downward trend and need to accelerate the release of existing production capacity.

Some practitioners also expressed that in the face of a comprehensive downturn in real estate, an unfavorable economic environment, and the pressure of the original “land finance” gradually transforming into “mineral finance”, what should the sand and gravel aggregate industry do? It is an established fact that the contradiction between supply and demand is prominent, and overcapacity exacerbates the decline in demand for sand and gravel.

A new round of power and production restrictions is approaching.

Especially after experiencing the largest decline in decades, the crisis in the cement industry is even closer.

However, on the one hand, local government authorities have increased their efforts to mine sand and gravel aggregates, continuously pushing for large and ultra large sand and gravel mines; On the other hand, large enterprises are also accelerating the release of existing aggregate production capacity.

Some industry colleagues joked that the cement industry is relying on staggered peaks to continue its life.

The person in charge of China Electric Power Construction once told a reporter on Sandstone Aggregate Network that, unlike the previous approach of “taking as much as possible” on the basis of meeting the requirements, the focus of China Electric Power Construction’s work will shift in 2023.

The average annual production capacity of newly traded sand and gravel mining rights in Anhui, Hubei, and Guangdong provinces exceeds 5 million tons.

According to Sandstone Aggregate Network, with the arrival of summer electricity peak, cement associations in Sichuan, Inner Mongolia, Xinjiang, Hebei and other regions have successively issued staggered production notices.

Contrary to the decline in demand, the supply side is constantly increasing, and the auction efforts of large sand and gravel mines in the core area are not decreasing.

According to incomplete statistics from the Sand and Aggregate Network Data Center, the demand for sand and gravel in China in 2022 was approximately 15.885 billion tons, a decrease of 10.94% compared to 2021.

The average annual production capacity of Zhejiang, Jiangxi, and Guangxi exceeds 4 million tons.

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Among them, there are 31 mines with an annual output of over 10 million tons.