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China’s cement plants could move overseas

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World Cement,

It is expected that China’s cement demand will continue to grow this year, but at a slower rate. In December, output was up 10.8% y/y at 205.29 million t, while the full year figure was up 9.6% at 2.41 billion t of cement, according to figures from the National Bureau of Statistics, as reported in the press. Thus far in 2014, cement prices and inventories are reported to be stable thanks to good weather conditions.

Blue sky goal

One factor affecting cement output may be the government’s programme to reduce pollution, which has already resulted in plant closures. A new report entitled ‘Blue Sky Roadmap’ claims that in provinces such as Shandong and Hebei, emissions from many large-scale enterprises seriously exceed standards. The report was released jointly by the Institute of Public and Environmental Affairs, Renmin University Institute of Environment and Planning, the SEE Foundation, Friends of Nature, Envirofriends and Nature University.

As of 2 January 2014, 179 cities are releasing real-time air quality information that can be accessed by the public on computers or smart phones. This is in accordance with a regulation issued in July last year by the Ministry of Environment Protection, which requires all provinces to establish an online platform through which real-time monitoring data from major emitters can be disclosed to the public. The report has taken the data available so far and concluded that some 65% of China’s industrial emissions come from the thermal power, steel, cement, refining, petroleum and petrochemical industries. It further adds that if such facilities were to comply with emissions standards, air quality would be improved.

Carbon relocation?

In a related move, China’s Ministry of Industry and Information Technology is reported to be considering establishing an investment fund to encourage businesses with surplus production capacity to move that capacity overseas. Such measures have been taken before, as in 1999 when China targeted the textile, garment and home appliance sectors after the Asian financial crisis. This time, China’s State Council is reportedly targeting the steel, cement, aluminium, plate glass and shipping sectors, all of which show a production capacity surplus. Such businesses would not be easily moved and a spokesperson from the Chinese Academy of International Trade and Cooperation has indicated that any relocation of assets should be determined by the businesses themselves and not state-driven.

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