China’s cement sector today and in the future

1  Introduction
After 30 years of reform and opening up to the outside world, from 1978 to 2008, the Chinese cement industry has been ­developing at an accelerated tempo. The developments in China during the last 30 years were similar to the situation in the most important western industrialized countries after World War II from 1948 to 1978 (Tables 1, 2; Figs. 1, 2). That is to say that in a comparable 30 year period, their common feature is an economy in a state of change, per capita GDP or income between 2000 US$ and 4000 US$, average cement consumption 300 to 800   kg/per ­capita and accumulative cement consumption between 10 to 15 t.
 
After more than 30 years of rapid development, the cement industry in the most important industrialized countries was characterized by the phenomenon of separation between economic growth and cement consumption. In other words, the cement output was not increasing with the increasing GDP. Generally speaking, cement consumption remained stable between 300 kg to 500 kg/per capita for a long period of time.
2    Forecast from 2007 to 2050
Due to an imbalance of development in China, the average cement consumption in the eastern provinces reached 1.5–2.0 t while the average for the whole country is about 1 t. The provinces, like Guangdong, Zhejiang and Shangdong showed negative growth in 2008. According to our forecast, the developed regions along eastern coastline in China would first reach saturation level in cement consumption in around 2010 (Table 3). This is mainly because it already has an advanced economy. The demand for cement in this area is more than that in other areas, where the saturation point appears between 2015–2020 (Tables 4–6). At about 2015, the central region of China would follow and the western region approximately in 2020. The saturation point for cement consumption in China (Table 7) will be reached from the year 2015 to 2020, followed by a gradual decrease year by year, and will then move into a stable state by around 2035.
 
If, after the year 2035, during a stable period of cement consumption, the per capita average cement consumption would be about 300 to 400 kg, with a population of 1.6 billion in China, then the total cement consumption would be 480 million to 640 million t. With a clinker factor of 0.7, the output of clinker would be 336 to 448 million t. So, CO2 emissions would be reduced to less than 500 million t, a reduction of 50  % when compared with the present.
 
Cement demand will decrease perceptibly due to lower cement demand caused by full development in building (Fig. 3) and infrastructure construction (Fig. 4) after 2020. In addition, there will be a shortage of natural raw materials and energy resources by then, so that it will be impossible to fulfil the cement demand and the cement industry and will not be able to utilize its full capacity.
 
Furthermore, with the development of society and of science and technology, new building materials will be emerging, such as wooden building materials, so that cement will be replaced by a great number of other materials by 2020 or 2030. As a result, cement may not be the building material used in great quantity for construction work. Based on the above analysis, it is foreseeable that cement consumption will follow the predicted trend in the next 10 to 20 years.   
The main question is whether the government can instigate a policy in time to promote and revive the development of wooden building structures. And the fostering of forests will be the priority in next 10 to 20 years. Forests are not only a source that can be used to obtain materials that substitute cement and concrete, but are also efficient CO2 absorbers.   
3    Potential for the improvement of energy efficiency
As there is a lack of accurate statistics, methods have to be worked out to calculate energy efficiency on the basis of the following sources of statistics:
 
According to the data in Tables 8 and 9, the energy consumption of the entire cement industry in China in 2007 was 142 million tce (tons coal equivalent). With the cement output of 1.36 billion t in this year, taking a clinker factor of 0.7, then the clinker output was about 952 million t. In 2008, the expected cement output would be som 1.40 billion t, and accordingly clinker would be near to 1 billion t.  
Owing to a change in statistical methods, the Cement Association has only the average data of the whole industry for clinker heat consumption and cement power consumption in 2006. That is 130 kg ce (910 x 4.18 kJ/kg cl.) for clinker heat consumption as an average for the whole cement industry in China in 2006, and a 92 kWh/ t cement of power consumption. However, for companies, the best practice (BP) for heat consumption is 700 x 4.18 kJ/kg cl., and 68 kWh/t cement for power consumption. Based on the above data, a general prediction for systematic energy efficiency improvement in the cement industry is as follows:
 
(1)    The potential for the improvement of systematic heat consumption: (0.130 – 0.100) x 1 billion t = 30 million tce
    Convert to CO2 reduction:
    30 million tce x 2.4 = 72 million t
(2)    The potential of improvement for systematic power consumption: (92 – 68) x 1.43 billion t = 34.32 billion kWh;
    Convert to CO2 reduction according to current coal consumption in utilities in China (0.370 x 2.4 = 0.89 kg CO2): 34.32 billion kWh x 0.89 x 10-3 = 30.5 million t.

Since the power consumption of 68 kWh/t cement is only realized in individual cement plants in China, the Cement ­Association suggested that the 85 kWh/t cement of power consumption is a target for the near future. So, the potential of power saving for the near term is (92–85) x 1.40 = 9.80 billion kWh. These two improvements of the systematic approach for heat consumption and power consumption would be realized at least 5 to 10 years later.
 
If it is calculated by 130 kg ce/t clinker, for the whole cement industry in China, the heat efficiency of clinker burning is 45 %, that is a difference of 10  % to the best practice of 55  % in this country. However, it was some 35  % in 2005. Some uncertainties exist regarding the data due to a change of statistical method at the moment. Nevertheless, it is desired to achieve the 55  % heat efficiency for the whole industry within 10 years.
 
4    Power generation by means of waste heat
Power generation by means of waste heat can be utilized to improve energy efficiency of the clinker burning system. With the development of AFR and RDF, waste heat utilization in cement plants will be extended. However, waste heat recovery (WHR) systems in the Chinese cement industry are increasing nowadays. With the power recovered, the heat consumption of clinker in some cement plants is also increased. So, the systematic heat efficiency should be calculated by the clinker heat consumption and the WHR system together.
 
Based on the situation in China, the range of power generation is between 30 and 50 kWh/t clinker. If half of the clinker from the cement plant is produced with a WHR system, the power generation due to the production of 500 million t of clinker gives a remarkable CO2 –balance:
     30 x 500 million t = 15 billion kWh
    50 x 500 million t = 25 billion kWh
    150 x 0.89 x 10-3 = 13.35 million t CO2
    250 x 0.89 x 10-3 = 22.25 million t CO2
 
5    Wood as building material
Development of wooden structures would reduce cement output and expand the life of buildings for energy saving and emission reduction. If the forested area in China is as extensive as that in the industrialized countries in Europe and America, and if most residential houses are built with wooden structures, there is no need to produce so much cement. In addition, the average life span of Chinese buildings is only 30 years, which has to do with the quality of materials, and also with their design and the construction of the building. However, compared with those countries in which the average life span of buildings is 100 years, we have to produce twice as much cement as those countries.
 
From the point of view of long-term development strategies, in China it will be possible to reduce the cement output gradually during the next 10 to 20 years, if the sustainable principle is followed to make the rate of afforestation higher than the rate of deforestation, and then an appropriate environment for the development of wooden buildings is gradually re-established. For example, if wooden buildings become popular in more than 50 % of the rural districts as before, the demand for cement throughout the country will be reduced by half. That is, the output of cement would have been reduced from 1.40 billion t around (in 2008) to some 0.6 billion t, even if the population would have grown to 1.6 billion by the end of 20 years. The average cement consumption per capita would have reached 375 kg of cement, nearly the same or more than the average consumption of cement in the world at present (not including China). There is no doubt that to adopt the above measures in good time will have a definite effect on energy saving and CO2 emission reduction.
 
6    Plant closures and consolidation expected
Cement production (Table 10) according to the NSP process has improved and increased rapidly (reaching 55  % in 2007, more thna 60 % in 2008); outdated production capacity (mainly vertical kilns) has been further reduced (still at 40  % in 2008), and industry centralization has further improved (18  % in 2007).

According to the central government plan, the number of cement plants is supposed to decrease from 5200 in 2007 to 3000 in 2010, with 70  % NSP process and 30  % industrial centralization, i.  e., the top 10 biggest cement companies should hold a 30  % market share (Table 11). In Table 11 the ranking of clinker production firms given out by the Digital Cement Network in 2007 is shown, the top 3 are Conch Cement (68.8 million t of clinker), China United Cement (28.06 million t of clinker), Shanshui Cement (20.28 million t of clinker); the 4th to 12th   positions are in turn Huaxin, Jidong, Tianrui, Sinoma, ­Lafarge Shui On, Huarun Cement, Jinyu, Hongshi and Zhejiang ­Sanshi. The statistics showed that there are 12 cement groups in China with a designed clinker capacity of over 10 million t in 2007, the total clinker capacity of these cement companies amounted to 240 684 million t, converted into a cement capacity of 313 123 million t. However, cement output in 2007 was 1360 million t, and the cement capacity of the first 12 cement firms is only 23  %.
 
According to the national plan, from 2007 to 2008, 136 mil­-lion t of cement capacity would be eliminated from the market, and 148 million t in 2009 to 2010. It is expected that by 2020, the clinker from NSP kilns would be controlled at 700 million t; cement firms would be reduced from the current 5000 to 2000. There are 10 cement groups with capacities of up to 30 million t of cement and 40 cement companies with capac-ities of up to 5 million t and over.
 
China mainly supported the rapid expansion of 12 large national cement groups and 48 regional cement groups to scale up the development of the large and medium-sized NSP production lines.
 
7    Type of technologies, fuels etc. in use and anticipated
According to the plan of the central government for the elimination of outdated cement capacity, all types of old dry process hollow kilns and wet process kilns should be completely shut down before the end of 2008. The remaining kilns are all mechanical shaft kilns and NSP kilns, including a few SP kilns and JT model shaft kilns. If the plan is carried out effectively, it is estimated that the capacity of NSP kilns would be close to 65  % in 2009. The remaining 35  % of the output are basically from the shaft kilns. It is planned to reduce this portion to 30  % in 2010. In 2020, 5–10  % of shaft kiln capacity may still be in existence in the remote mountain areas.   
Almost all the fuel used in the cement industry in China is coal. It is expected that secondary fuels will be utilized to a much greater extent in the future, but the main obstacle currently to this is the fact that domestic waste is not collected and disposed of separately by classification. Therefore, the cement industry is not able to use  this waste directly, and self-processing in the cement plant is associated with the problem of high costs and a lack of support in the policies of the country. In the major ci-ties, sewage is not treated and is discharged directly into rivers, so sewage sludge is not generally used for the cement industry. In 2009, the first pilot cement plant which is burning sewage sludge as AFR has been successfully put into operation in Yuexiu-HeidelbergerCement, Guangdong Province.
 
If AFR or RDF were widely used in the cement industry as they are in Europe, China would have 150 to 200 million t of municipal waste each year, which could be used in the cement industry and at least 1/4 of the coal used in the cement industry today would be replaced by these secondary fuels. CO2 could be reduced by the same amount, and, at the same time, there would also be a huge improvement in the quality of air and water resources.
 
8    Key similarities/differences with other countries
From the perspective of the developmental stage, the rapid development of China’s cement industry during the last 30 years was similar to that of the 30 years following World War II in the most important industrialized countries. As regards the comparison with the current cement industry in the industrialized countries, there is still a substantial difference. This can be summarized in the following 6 points:   
(1)    40  % of the plants in the Chinese cement industry are still operating with outdated equipment and technology and we need a further 10 years for the modernization measures to take effect.  (2)    The industrial structure is still segmented, and integration remains at a low level. However, efforts are being made by the country to change this. Whereas more than 4000 cement plants and over 1000 cement grinding stations are in operation in China alone, while there are only 1500 cement plants in the rest of the world. The industry has a long way to go to achieve reorganization and consolidation in the future.
(3)    The average per capita consumption of cement in China is about 1 t and half of the total cement output is produced in China. However, the accumulative cement consumption is still lower compared to the industrialized countries, i.e. about 1/3. For energy efficiency improvement, in the short term, China’s cement sector would have at least more than 10  % room for improvement when compared with the advanced level in the rest of the world.
(4)    The reason for the great demand for cement in China is due to the fact that the percentage of brick and cement concrete structures in buildings is very high even though the accumulative cement consumption is lower. This is very different from other countries. Wooden and steel structures play a relatively larger role in building structures in the industrialized countries, which leads to a weaker demand for cement.
(5)    China has the largest population in the world, and the per capita average building area and infrastructure is about 1/3 of that in the industrialized countries. At the same time, the average building life span in China is about 30 years, so this increases the demand for more cement.
(6)    China is a country with a large population, and the pressure to provide employment for everyone is relatively high. Full employment is a high priority for the government. Therefore, the per capita productivity of labor in the cement industry is also lower, and is about 1/5 to 1/10 of that in developed countries.