Global cement demand to see +4.9% growth

22 February 2013

Worldwide demand for cement is expected to grow at +4.9% per year up to 2017, according to new forecasts from research company CW Group. The global production volume increased +4.1% last year – a greater rise than expected – for a total of 3.73 billion tons (3.39 billion tonnes).

According to CW Group, the forecast increases over the next four years will see global per capita cement consumption grow from 448 kg/person in 2009, to 539 kg/person in 2012 and 645 kg/person by 2017.

“Even though we remain cautiously optimistic that recovery is gaining a foothold in some of the core markets and problems in Europe are slowly being contained, if not resolved, many markets are still in the balance. In particular, we are happy to see the US turn-around progressing, but are also a bit nervous about some of the larger emerging markets if global economic conditions deteriorate,” said CW Group’s managing director and head of research Robert Madeira.

In terms of utilisation, CW says the historic peak was in 2009, with global cement production (excluding China) running at 68.1% of the theoretical maximum. It added that when China is included, the recovery trend strengthened in 2012 to 77.2% after hitting bottom of 75.6% in 2010.

“Based on a bottom-up tracking of greenfield and brownfield cement plant projects, as well as permanent and semi-permanent closures, we see utilisation improving through 2017 to 82%. However, with an abundance of new projects in growth markets, we do caution as we see supply outpacing demand in some markets,” explained Claudia Stefanoiu, senior analyst with CW Group’s European Analytics Team.

North America is projected to show one of the strongest growth trends. CW Group said it expected demand in North America to trend above the demand growth in the Middle East of +7.1% per year on average.

Growth in China is expected to be positive but moderate, while markets in Sub-Saharan Africa and some recovering North African markets will see growth above 6%. Latin America is expected to decelerate, with growth falling to +5.6% as the Brazilian market moderates. Asia (excluding China) will see growth accelerating with Indonesia and Philippines seeing strong growth in the next years.

The company added that Western Europe will see a weak recovery over the next few years as markets bottom out and the weakest - Greece, Portugal, Spain - run out of room to fall much further. Eastern Europe and the CIS will do better however, driven by the non-European markets in the near term with the region’s demand growing +5.2% per year on average through 2017.

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