HK Stock Market Move | Cement stocks all fell across the board, with the industry entering the traditional off-season. Institutions expect production capacity to accelerate contraction in the fourth quarter.

Cement stocks fell across the board. As of the time of publication, BBMG Corporation (02009) fell by 5.49% to HK$0.86; WESTCHINACEMENT (02233) fell by 4.12% to HK$3.26; Anhui Conch Cement (00914) fell by 3.92% to HK$24; CNBM (03323) fell by 3.85% to HK$5.5; Huaxin Cement (06655) fell by 1.59% to HK$16.73. Shenwan Hongyuan Group's research report pointed out that the third quarter is traditionally a slow season for the cement industry, and cement prices are expected to peak and then decline in 2025. According to Digital Cement Network, the average cement price in Q3 of 2025 was 353.1 yuan per ton, a decrease of 27.6 yuan per ton from the previous quarter and a decrease of 33.5 yuan per ton year-on-year. Cement production in July and August decreased by 5.5% and 7.0% respectively year-on-year. Overall, the cement industry is expected to face profit pressure in the third quarter. On September 24, a joint work plan for stabilizing growth in the building materials industry for 2025-2026 was released by six ministries and commissions, shifting the policy focus from revenue to profit, and further requiring the cement industry to complete excess production disposal by the end of 2025. It is expected that Q4 will be a peak period for supplementary production capacity indicators, with the industry capacity reduction expected to accelerate. China Galaxy Securities stated that in the future, the demand for "golden September and silver October" is expected to continue to grow, but with a soft terminal market, the growth is limited. Considering that the winter will bring a relatively long off-peak kiln stoppage period, and with the current marginal improvement in demand, cement companies are expected to continue to actively raise cement prices. In addition, the expected increase in coal prices will further support cement prices. The bank also believes that accelerating the "counter internal rotation" will optimize industry supply, and the contradictions between supply and demand are expected to ease, leading to expectations of rising cement prices and the potential recovery of profits for regional leading companies.