Cement Energy and Environment

New capacity is mainly concentrated in the southwest and northwest, like the markets of Sichun, Guizhou, Gansu, Qinghai, Xinjiang, Shanxi and Inner Mongolia. Cement prices ICR: What were average cement prices in China in 2010, and how will they change in 2011? CCA: In 2010, the average price of cement in China was CNY381/t(US$ 58), which was an increase of 3.79 per cent on the previous year. Prices rose from last August and in east China the price rose the highest. Because some of the provincial and municipal governments were keen to complete the year's energy conservation target they limited the use of electricity, which resulted in cement companies ceasing production, causing supply shortages and resulting in cement price rises. Price rises were also due to the increased "In 2010, dry process lines accounted for over 80 per cent of total capacity, and it will reach more than 95 per cent by the end of the Jlh Five– year Plan. " cost of mining and other raw materials, energy prices, as well as high labour and environmental costs. · ICR: What is the power supply situation like in China and how has it been affecting cement prices? CCA: With China's rapid economic development, over the past few years, power supply has always been tight. By 2010, China's installed power generation capacity reached 960 mkW, according to a report .by the China's Electricity Council. In 2011, China electricity consumption will reach around 4.7 trn kWh , an increase of 12 per cent, but lower than the growth rate of 14.56 per cent in 2010. In general, electricity costs account for about 25 per cent of the total cost of cement production . Price adjustment in China is subject to strict government control. China's cement producers widely use waste heat generation technology, which saves 30 per cent of the electricity costs. Therefore, even if electricity prices increase, the effect is modest for large cement enterprises. Environment ICR: To what extent are Chinese producers making provision for reducing C0 2 emissions? CCA: Like other international cement manufacturers, cement producers in China have also devoted strong efforts to reduce C0 2 emissions. The most significant measure is the use of cement kiln exhaust gas in low– temperature waste heat power generation. At the end of 2010 , approximately 700 lines have been completed with waste heat power stations and the total installed capacity is over 4800 MW, about 34bnkWh of electricity-the annual reduction of C0 2 emissions is about 29 Mt. Furthermore, the use of industrial waste to reduce cement clinker is now widespread and accounted for 30 per cent of clinker substitution in 2010. In addition , energy-saving grinding technology and a variety of low-carbon cements are widely used. The government has announced that energy consumption and greenhouse gas emissions will be two of the performance indicators for companies. Industry development ICR: In what ways will the government's 1 ih Five-Year Plan (2011-15) impact on cement demand and the production in China over the next five years? CCA: The country's "1 ih Five– Year" plan is still a long-term steady development plan. The demand for cement products will remain stable in the coming five years, while the growth rate will gradually drop. The government has limited the construction of new cement lines and any new lines that are put into operation were approved two years ago. From October 2009, the government has not approved any further new cement projects. At the end of 2011, there will be no new lines for China's cement. It means the total capacity of cement will be capped at a fixed number. In future, 250 Mt of backward production capacity is going to be eliminated . ICR: What future role will foreign companies play in the cement industry in China? CCA: The contribution of foreign cement groups in China's cement industry can be divided into three areas: technology input; capital investment; management input. Undoubtedly, foreign cement groups have contributed a great deal to China's cement industry, especially in dry-process cement technology. Even today, the management experience and the concepts of health and safety of foreign enterprises is still worth studying. China's cement market is an open market: Lafarge Cement, Taheiyo Cement, Holcim Cement, HeidelbergCement, 36