The global cement industry: pandemic impact and outlook to 2022

After a year like no other, today's publication of the 14th Edition of The Global Cement Report™ provides new insights into one of the most dramatic years in the history of the cement industry, as well as forecasts for 2021-22.

After the World Health Organisation declared the COVID-19 outbreak a pandemic on 11 March 2020, governments worldwide imposed unprecedented lockdown measures that curtailed economic activities, particularly in the second and third quarters of the year. Initially, construction activity was particularly impacted, and in some markets, the cement industry came to a complete halt.

Given the severe contraction of demand during the early months of the pandemic, and despite the unprecedented distortions and pressures exerted on economies worldwide, demand actually bounced back to finish the year more or less level with the year before.

At 4143.71Mt, global cement consumption fell just 0.23 per cent in 2020 versus 2019, while per capita demand remained solid at 540kg.

Much of this apparent stability was down to China, the world’s largest consumer representing 57 per cent of global demand, which ultimately secured a YoY growth of 2.17 per cent in 2020, with volumes climbing to 2377.68Mt.

Outside of China, global demand fell by 3.29 per cent, although a high degree of regional variation was evident.

The hardest hit regions were the Indian Sub-continent (-11.91 per cent), south Asia (-8.26 per cent) and north Africa (-8.04 per cent), which saw the largest declines, as the pandemic and related lockdowns stifled construction activity.

Other regions performed remarkably well when, after an initial pause, demand quickly recovered as the pandemic prompted change in construction patterns and a surge in homebuilding and renovations.

Regional growth was highest in the Middle East (8.98 per cent), led by strong performance by the major markets of Iraq, Iran and Saudi Arabia. Across west Africa, robust demand in Nigeria as well as many of the neighbouring markets saw regional demand expand by 8.22 per cent. Eastern Europe (5.54 per cent) and east Africa (4.27 per cent) also enjoyed positive trends.

Across the world, an unprecedented wave of government stimulus packages has helped drive a remarkable recovery, with GDP growth forecast to expand six per cent in 2021, according to the IMF, versus a fall of 3.2 per cent in 2020.

As the pandemic continues well into the second half of 2021 with no definite end in sight, visibility remains uncertain, but from current trends, the global cement growth outlook is expected to exhibit a V-shaped recovery.

World cement demand is forecast to increase by 4.65 per cent in 2021F and 2.45 per cent in 2022F, according projections released in the 14th Edition of The Global Cement Report™.

The report also highlights a slowdown in capacity additions over the last two years. This is good news for capacity utilisation levels, which have plummeted over the course of the last decade, from 77 per cent in 2010 to 59 per cent in 2020. Stable or rising utilisation levels will provide a basis for improved profitability for cement companies going forward.

The Global Cement Report™, 14th Edition provides a comprehensive statistical review of over 170 cement markets and represents the only complete view of the global cement sector. For market data, trade volumes, forecasts and capacity developments covering the 2010-22F period, purchase your copy of the report today.