The Influence of Resource Tax Reform on Cement Industry

In October, the cement industry, which has never been calm, has seen another wave: the State Council has officially issued a new edition of the Resource Tax Regulations, announcing an increase in resource tax rates for crude oil, natural gas and coking coal. A stone provokes a thousand waves. When this news came out, many media rushed to report and comment. As a downstream industry closely related to the energy industry, the cement industry will inevitably be attacked by this policy.

On October 10, the State Council promulgated the revised "Provisional Regulations on Resource Tax" and announced the formal adjustment of the existing resource tax rate. The crude oil and natural gas resource tax is levied at 5%-10% of the sales price, and the coal industry still maintains a certain amount of levies, but the coking coal tax rate has increased from 8 yuan per ton to 8-20 yuan per ton, and other coal. Keep 0.3-5 yuan per ton unchanged.

We can ignore the mobilization of oil and gas tax rates for the time being. However, the increase in the coal resources tax that is closely related to the cement industry should be focused on.

In fact, since the trial of resource tax reform started in Xinjiang in June last year, the market has been generally concerned that the national coal resource tax may be changed to the ad valorem measurement method, which may result in a substantial increase in the tax cost of coal companies. However, judging from the new resource tax regulations announced this time, the State Council has obviously adopted the principle of caution, and the only one that has a significant impact is coking coal.

Industry analysts said that coal accounted for more than 70% of China’s energy consumption, a large impact, and inflationary pressures have not completely subsided, may be the reasons for this resource tax adjustment is still relatively "moderate", but this time The adjustment is only a beginning, and there is still room for the future because after the land finances approach the dead end, redistribution from the lucrative coal industry is also a realistic option for the government.

In response, Zhao Jialian, secretary-general of the China Coal Economic Research Association, once expressed his opinion that "Although the coal's "ad valorem" rating has not yet been opened, it will increase the levy and is already laying the foundation for the transfer.

However, I believe that even if the levy is raised, the impact on coal companies is not large. Let's calculate an account. If calculated according to the highest standards, the cost of coking coal resources will increase by 12 yuan/ton, with a margin of 150%, which will have a relatively large impact. For thermal coal, compared with the previous standard of RMB 3.2/ton for coal-fired thermal coal in Shanxi and Inner Mongolia, the new standard only increased by RMB 1.8/ton, with little impact.

In addition, coal companies have good profitability in China. Coal companies have a strong ability to pass on resources, and resource tax reform is likely to become a driving factor for companies to increase coal prices.

Once the coal is popular, the “first domino” that will be pushed up again as the coal price rises will be the power company. This can be said to be worse for the existing thermal power companies that have already lost money.

This year, a wide range of electricity shortages have caused serious impact on the production of the cement industry. If the coal price increases, coupled with the “market coal, planned electricity” pricing mechanism, the electricity shortage may be even more raging; on the other hand, if the electricity price rises, For the cement industry, which is located downstream of power resources, it will undoubtedly significantly reduce profitability.

Of course, everything has a two-sided nature. The increase in resource tax this time has a negative impact on the cement industry, but it also has some positive effects. The first and foremost is to promote the elimination of energy-saving emission reduction and backward production capacity.

In recent years, China's economy has grown rapidly, and all construction has achieved tremendous success. However, it has also paid a huge price for resources and the environment. The contradiction between economic development and resources and environment has become increasingly acute, and people have reacted strongly to environmental pollution problems. With the advancement of industrialization and urbanization in China, the accelerated development of industrialization has increased the demand for cement. The cement industry is classified as "three highs", namely high-consumption, high-emission, and high-pollution industries.

If the coal resource tax increases, the cost of cement companies will increase, and in order to reduce costs and gain more profit, cement companies will inevitably increase energy conservation and emission reductions, increase the efficiency of resource use, and eliminate a large part of the resources that lag behind in terms of lagging production capacity. It is good for development.

Therefore, this resource tax adjustment is undoubtedly a double-edged sword, that is, in addition to exacerbating the power shortage and reducing the profitability of cement companies, it can also promote energy-saving emission reduction and eliminate backward production capacity. Of course, the specific development trend depends on the performance of the market.