Cement

Cement Global Market Outlook

• The global cement demand is estimated at $379.97 billion in 2023, and it is expected to reach $421.27 billion in 2026, with a CAGR of 3.6 percent between 2021 and 2026.

• With new tax policy in Europe and increasing inflation in North America along with supply shortage has impacted the cement price in the region

• The global economy is currently experiencing a period of uncertainty, which has impacted the demand for construction materials, such as cement, sand, and gravel

• APAC accounts more than 60 percent of the global cement market. China is the highest consumer and producer of cement. In the first nine months of 2022, cement output in China decreased by 12% year over year to 1.56Bnt.

• The EU's legislators decided to impose a border tax on products with high pollution levels, such as steel, cement, fertilizer, aluminum, and other products with high carbon footprints, in order to protect Europe's own climate goals while putting pressure on China and other countries to adopt more environmentally friendly practices.

•  The tax would raise the cost of the cement because Europe is a net importer of cement. For each metric tonne of carbon that producers release into the atmosphere will cost them about $94, on average.

Regional Market Overview for Cement

• APAC retained its share in the cement industry in 2022 and throughout the forecast period. Europe is expected to be the next major shareholder of the cement market. Individually, by country, China is a leading market player in the cement industry.

• About 6.3% of the global cement demand is accounted for by the North American cement market.   As housing stat decline, so does the demand for cement from the residential sector. The market is expected to be driven by government infrastructure projects. Thus, in Q1 2023, prices in the area are anticipated to increase.

• Due to rising demand from the residential sector and public sector reconstruction demand, the LATAM regions' need for cement has improved.

• Cement demand in the Middle East is anticipated to rise in Q1 2023 as a result of significant demand from Saudi Arabia, Iran, and Iraq

Global Cement: Market Drivers and Constraints

Drivers

• Government Infrastructure Investment: Infrastructure demand is anticipated to be the largest contributor to cement demand and will provide a steady pipeline of projects, constituting to almost 25–30 percent of the global demand over the next 5–10 years. The global investment for infrastructure projects is expected to total $24 trillion over the next 20 years, with $0.85 trillion being invested per year

• Emerging Economics: With the overall average economic growth in the emerging economies has shown significant increase. The key trend in the cement industry is a significant growth of the construction sector in the emerging markets, such as India, China, Vietnam, Australia, and Indonesia. In the next decade, India is anticipated to grow faster compared to China

• Global Recovery: The improving macro-economic conditions have resulted in increased investment in the construction activities across various sectors. Business confidence among investors is on the rise, resulting in higher investment from the private sector. Various economies in Asia, the Middle East, and the Americas are improving, driving higher demand for cement over the next few years

Constraints

• Price Volatility: With resumption of construction projects post pandemic, the prices for construction materials surged significantly. The European countries force majeures construction materials shipments to meet the internal demand. This surge has pushed private investors to take back seat on new projects and approached a wait-and-watch situation. With the prices stabilizing, due to seasonal holidays and climatic condition is expected to push the prices in the coming months

• Labor Shortage: Hiring and retaining skilled laborers are the greatest challenges in the construction industry both in the developed and developing/emerging countries

• Geopolitical Crisis: Due to Russia–Ukraine conflict, the cement industry witnessed a rise in pricing, due to increase in raw material cost (like Coal and Pet Coke), energy cost, and shipment prices