As the global economy regains its growth trajectory in 2021, CW Research expects to see a quick recovery in Asia ex-China and the Middle East regions, which are expected to drive cement consumption growth over the next five years, according to CW Research's 1H2021 update of the Global Cement Volume Forecast Report (GCVFR).
Cement consumption is estimated to witness a 5 percent growth year-on-year in Asia ex-China this year, after a decline of more than 6 percent in 2020. In the Middle East, cement demand is set to see a growth of almost 4 percent after a much smaller rise of less than 1 percent in 2020.
“2021 has brought optimistic expectations of a cement demand recovery. However, global markets still see divergent regional growth trajectories. China’s cement demand is expected to plateau, with demand gradually set to decline from 2024 onwards. On the other hand, Asia ex-China and the Middle East are predicted to show robust yearly growth until 2025,” noted Prashant Singh, Associate Director at CW Group.
Pakistan, India, Bangladesh and Vietnam’s demand set to increase in 2021
In Asia ex-China cement demand is likely to see an increase in 2021 estimated at 5 percent driven by increases in Pakistan, India, Bangladesh and Vietnam.
In 2020, cement demand in the region declined mostly driven by a double-digit drop in Indian cement consumption, because of pandemic restrictions. Nevertheless, in the last quarter of the year government investments in infrastructure projects helped to nudge the sector back into a growth trajectory. However, in 2Q2020 this growth has once again been impacted by lockdowns caused by a new Covid-19 wave.
In the next 5 years, India and Vietnam’s governments are likely to support numerous large-scale support transport, energy, residential and industrial infrastructure projects increase the requirement for cement.
Outlook for cement consumption in the Middle East remains bright
In the Middle East, the outlook for cement consumption remains bright in the coming years as crude oil prices have largely recovered from historical lows during the first half of 2020.
Major construction projects including NEOM city in Saudi Arabia and the 2022 Qatar World Cup are expected to drive cement demand over the forecast period.
US construction sector to drive growth in North America’s consumption
Cement demand in North America is projected to increase over the next five years driven by the United States’ construction sector, as the country accounts for majority of consumption in the region.
Meanwhile, in Latin America, despite the economic contraction in major countries including Brazil and Mexico, the cement sector had a surprisingly positive performance in 2020. Latin America in 2021 is expected to witness an increase of around 3 percent year-on-year in cement demand and is set to rise further until 2025.
The CW Group’s Global Cement Volume Forecast Report (GCVFR) is a twice-yearly update on projections for cement volumes on a national, regional and global level. The forecast provides global and regional outlooks, as well as detailed perspectives on 57 of the world’s most important countries’ cement consumption, production, net trade and cement production capacity. The five-year outlook presented in this benchmark study enables industry professionals to shape their perspective on markets and business priorities.
Find out more about the report here.