Beijing prohibits new cement and glass capacity, in latest industry stabilization plan
On Wednesday, the industry regulator (MIIT) released a 2025-2026 growth stabilization plan for the building materials industry.
- Beijing released an analogous plan for steel on Monday.
The plan establishes two main priorities:
- First, curbing "vicious competition" – primarily through prohibiting the establishment of new cement and glass production capacity.
- Second, supporting emerging market segments – by targeting green building material revenues to exceed RMB 300 billion in 2026 (up from RMB 278 billion in 2024).
ICYDK: "Green building materials" include the likes of low-carbon cement, recycled materials, and energy-efficient insulation.
Our take: Restricting new capacity – rather than clamping down on current levels – demonstrates a similar ethos as the steel plan.
- Beijing isn't attempting to "fix" longstanding overcapacity, but instead to limit losses and safeguard baseline profitability.
Our other take: The green building material revenue target, meanwhile, is interesting in two regards.
First, it directly links ongoing green building efforts – which are overall low-priority – with a high-priority industrial upgrading effort.
- This linkage will prove a boon for green materials producers.
Second, despite Beijing's evident support for green materials, the actual target here is surprisingly conservative.
- The revenue target represents 8% aggregate growth across 2025 and 2026 – compared to 39% y/y growth in 2024.
The bottom line: Beijing is setting a greener, higher value-added course for building materials – just like for steel.
- But officials remain cautious about the pivot – likely nervous about raising hopes for growth in a construction market in crisis.