China’s Ministry of Industry and Information Technology (MIIT) has said that the expansion of cement and glass production capacity will be strictly off-limits in 2018. As a part of supply-side reforms, China has been cracking down on excess capacity across different industries. Although it does allow some obsolete ones to be replaced by modern and more efficient facilities.
Restrictions on construction were imposed in 28 cities across northern China as part of the sweeping environmental protection campaign. These restrictions are due to be lifted in the middle of March and the notice was released just a month prior to that.
The statement on the MIIT website said that it is absolutely necessary for the new cement and glass making projects to follow the replacement capacity rules, “so as to ensure that the total production capacity will only decrease and not rise.”
According to an annual review of the building materials sector conducted by the MIIT, China’s cement output declined 0.2 percent year on year to 2.32 billion tonnes in 2017, while the flat glass production rose to 3.5 percent to 790 million weight cases.
The MIIT also added that the prices of flat glass has been on a consistent increase since September and the Chinese building materials industry earned revenues worth 7.5 trillion yuan (approximately $1.19 trillion) in 2017. This figure shows an increase of 8 percent year on year, as the average material prices saw an increment by 8.2 percent after declining for a period of two years straight, previously.
The China Cement Association said in December that by the year 2020, one-tenth of the total capacity or 392.7 million tonnes of capacity will be eliminated.