Great expectations?

Published 05 January 2021

While the start of 2020 saw optimism, COVID-19 quickly altered the view of even the most ardent optimist. As cement demand tumbled with construction sites going silent so did the sector’s initial confidence. However, at the end of the year, cement markets are recovering and there are expectations that 2021 may turn out better than initially thought. By Paul Roger, Exane BNP Paribas, UK.

Figure 1: YoY cement consumption growth, 2021E

What a 12 months it has been for the global cement industry. We were optimistic when we presented our scenario at Cemtech Middle East and Africa in February 2020. Then COVID-19 struck. We cut our forecasts to integrate a 14 per cent decline in worldwide cement consumption, but it did not pan out so badly. Some markets recovered strongly post-lockdown (eg, Brazil, Saudi Arabia, Malaysia, China and Mexico) whereas others with the strictest restrictions suffered (eg, France, UK, Central America and India). We now estimate that global cement consumption fell by seven per cent YoY in 2020 – not too bad considering the pandemic and testament to decent underlying demand in some big countries. Encouragingly, pricing has been more resilient than we feared, notably in western Europe.

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