Global warning - cement growth slowdown?
The recently published Global Cement Report Eighth Edition contains a wealth of very useful cement industry data, with analysis and statistical summaries of over 170 countries. This new publication should form an essential reference source for all those involved in the worldwide cement industry. Of course, I have a vested interest in telling you this, in that I led the editing team who compiled this latest masterpiece and thus stand to gain from its sales. Equally, I am also responsible for the book’s errors and omissions which now leap up from the printed page as I pen this commentary.
In brief, global cement consumption patterns are changing, with strong evidence of a slowdown emerging throughout 2008 with further sizeable declines in 2009, before a forecast rebound occurs in 2010. Looking back over the recent past, 2006 total global cement consumption was measured at 2568Mt, or if you prefer 2.568 billion tonnes – a gain of some 9.6 per cent on 2005 totals. By 2007, total consumption had moved up to 2763Mt, representing a lower annual gain of 7.6 per cent over the previous year. The well documented global financial collapse which reverberated throughout much of the world in 2008 has had an immediate impact on the global cement sector, and although cement consumption growth was to continue, moving higher at 2857Mt for the year, the annual upward change over the previous year is now recorded as slowing to just 3.4 per cent.
The worrying, although hardly surprising, news for 2009 indicates a further slowdown in global demand growth, sliding to +1.7 per cent, brought about by sizeable consumption losses across North America and throughout much of Europe. Even China has not been immune from such trends but with growth recorded at single figures rather than above the 10 per cent level.
Over the period 200-08, compound annual growth in cement consumption is noted at 7.2 per cent, some 3-4 percentage points higher than the long-term global average calculated over the past 20-30 years. As mentioned above, data for 2008 suggests that the global cement industry may now be showing the first signs of a return to such longer-term growth trends. Indeed, if one begins to factor in a higher accountability to global warming and a necessity to limit CO2 emissions over the next decade and beyond, we might one day even come to view this current decade as a high peak in global cement consumption levels.
Clearly, much will depend on what goes on within China, which now makes up almost 50 per cent of global consumption totals. As highlighted in the report, China again continues to dominate world rankings, with consumption levels rising from 1200Mt in 2006 to 1390Mt in 2008. Such gains are, however, slowing and perhaps indicative that longer-term Chinese cement consumption growth could also be much more limited. China’s per capita cement consumption now already stands at over 1000kg, somewhat high by world standards, and especially when compared to the world’s number two most populous country, India which now has a per capita cement consumption of only 150kg. On a positive note, China is now actively scrapping a sizeable percentage of its older polluting production units and beginning to take a more serious stance towards global warming issues.
Global cement trades are also showing signs of slowing. In 2006 total trade levels were measured at 180Mt, but by 2008 such trading volumes in cement and clinker were down to 164Mt. Our forecasts for 2010 show a further decline to 149Mt. Much of this trade is now controlled by the major cement groups, with independents and smaller cement groups probably accounting for 30Mt in 2008 or some 20 per cent maximum.
Reviewing the CD that comes with the book (in essence an Excel spreadsheet spanning the world of cement over the past 18 years) we can see that global cement consumption has risen by over 150 per cent during this 1990-2008 period. Most commentators, including myself, think that such growth is unsustainable. However, it has been pointed out that if sea levels continue to rise at a faster pace, many coastal countries will have to erect extensive concrete barriers to repel the advancing water, which of course means much more cement will be required. But that is getting a bit too cynical – even for me!
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