November 25^th, 2025

Market impact of Kiln Upgrading Implement
 

- Government Policy

 

During a provincial government meeting on November 14, 2025, explicit requirements were published for capacity replacement and kiln upgrades. 

All CCM producers using traditional reflective kilns must close down by December 20, 2025, and undertake the kiln upgrading. 

In the future, only kilns that have passed official inspection are allowed to produce. Small - scale enterprises lacking the capacity to upgrade their kilns will have to face business closure.

 

- Current Market Situation

 

Supply

Producers are currently producing at full capacity, for two purposes: finishing existing orders, and building as much stocks as possible for future sales.

 

Price

Market prices have increased twice within the passed ten days after the November 14 announcement, resulting in a total rise of RMB 50/ton already. 

Of which, last week, price started to increase by RMB 20/ton, mainly driven by energy costs rising that associated with the peak winter energy consumption season. 

Then this week, a further price increase of RMB 30/ton has been implemented, directly attributable to growing concerns on the tense supply. 

The future still shows a trend of price increases. How soon and how much the increase will be, will depend on actual market conditions.

 

- Future Market Insight

 

Stocks

Some players are actively increasing their stocks, which will allow for continued supply after the kiln shutdowns. 

However, the total volume of stocks held within the market remains uncertain. 

Also, whether these enterprises that hold the stocks will be able to have pricing power, and how they will set the prices considering their biggest interests, is still hard to predict.

 

Alternative Production Sources

Producers that have been producing with rotary or flash kilns which are already compliant with the new regulations, will not suffer from the production halts. 

Before, these kilns have usually produced high - grade products with MgO content over 95% due to its higher benefits. 

Facing the coming shortage of lower - grade products supply resulting from the shutdown of traditional kilns, many rotary or flash kiln owners are now considering shifting to produce 85% - 92% MgO also. 

But at this stage it’s still impossible to estimate how many enterprises will do such a transformation and how much new output in total they will bring.

 

Kilns Upgrading Timeline & Market Instability

Based on the kiln upgrade requirements and typical enterprise implementation plans, the kiln upgrading process is projected to need 4 - 6 months. 

Assuming it begins from December 20, 2025, the earliest completion of upgrades is expected around April 2026, with production potentially resuming in May 2026. 

During this enough long period of time, the market situation may go through several more changes, and somehow even become disordered. 

 

We will continue to keep close eyes on the developing of the market changes and provide timely updates. 

Should you have any pending order requirements, we recommend collaborative discussion to find out the suitable solutions.