The Influence of Japan Earthquake on the Supply and Demand Relations in China's Cement Industry

After the earthquake in Japan, the annual demand for rebuilding cement after the disaster may reach 80 million tons. We use two dimensions to measure the cement demand for post-disaster reconstruction in Japan. 1: Assuming that Japan's infrastructure after the disaster recovered to the level of economic peaks, cement demand will also be restored to the same level, cement demand will increase by more than 100%, and the annual absolute increase in cement will reach 45 million tons; 2: We compare Wenchuan With the earthquake and the earthquake, if the damage degree of this earthquake and the reconstruction speed after the disaster coincide with the Wenchuan Earthquake, the demand for new cement will increase to 48.83 million tons in the next two years. In summary, we believe that domestic cement demand may recover to 80-85 million tons in 12-13, which is 91.52% and 103.5% in 2010. The domestic cement production capacity in Japan is approximately 70 million tons. Due to the gradual decline in demand of the cement industry in Japan in the past 10 years, there is less information on cement production capacity in Japan. Most of the information shows its production capacity around 1991. At that time, the cement production capacity of various types of kiln in Japan reached 87.8 million tons. We estimate that the cement production capacity in Japan is about 70 million tons, based on the elimination rate of about 1% per year for its production capacity, and the annual production of 58.32 million tons of cement in 2009, and the internationally universal utilization rate of 70-80% for cement.

The problem of strength may restrict China's cement exports to Japan. According to the comparison between the national standards of cement in the two countries, the strengths of cements of all grades commonly used in China after 3 days and 28 days after being made into concrete are respectively 10%-50% lower than the Japanese national standard. This defect will lead to certain difficulties for the development of cement in the Japanese market. Moreover, even if it can be used in the Japanese market, the 1-3% increase in demand will not be of great help in alleviating the overcapacity situation of the cement industry in the next two years in China. The choice of targets will be considered in terms of regional advantages and export conditions. Although we do not think that the earthquake in Japan will have a major impact on the supply and demand of China's cement industry, it does not rule out that the market may use this speculation in the short term. We propose to select the target from two aspects: location advantage and export conditions. The location advantage is to select a cement production enterprise that is closer to Japan and has production capacity in the northeast region. The target is Jidong Cement and Yatai Group. With export conditions, it is a company that has historically exported cement or clinker. The targets are Conch Cement and Huaxin Cement.