The evolution of cement demand in 2021 is marked by wide discrepancies across regions, however, the only difference is the magnitude of the recovery in demand with the exception of China, with Asia ex-China and Latin America as the main drivers of growth this year, shows CW Research's 2H2021 update of the Global Cement Volume Forecast Report (GCVFR).
Asia-Ex China is expected to be the fastest-growing region in 2021, with growth estimated at almost 7 percent year-on-year, while cement demand in Latin America, which witnessed an increase of around 1 percent in 2020, is likely to see a higher growth of 5 percent this year.
China, meanwhile, is expected to see an unexpected decline in demand due to the growing debt concerns in the country’s real estate sector which cropped up in 2H2021. Given its outsized impact on China’s GDP, a slowdown in the sector is expected to negatively affect cement demand in the short term.
“Demand from Asia ex-China markets is expected to recover from a steep decline in 2020 and return to an upward trajectory, supported by markets including India, the Philippines, Bangladesh, and Vietnam. Meanwhile, in Latin America, the construction sectors of Brazil and Argentina have been witnessing a robust performance, boosting cement demand in those countries, thus, in the region,” observes Prashant Singh, Associate Director at CW Group.
Cement demand in the Philippines to jump in 2021
After a slump of 10 percent in 2020, cement demand in the Philippines is expected to see an increase of 9 percent in 2021. The country’s construction sector in the second quarter of the year was up by almost 26 percent. A strong rebound is expected for the sector, mostly driven by transport infrastructure, particularly rail and road development. It is estimated that the construction sector is likely to see a growth of 24 percent this year.
In India, cement demand is expected to witness a robust recovery in 2021, up by almost 9 percent year-on-year helped by sustained government investment in infrastructure projects as well as private sector real estate recovery, while in Indonesia, cement demand is also expected to grow in excess of 7 percent.
Brazil set to continue to see cement demand growth this year
Cement demand in Brazil is set to continue an upward trajectory this year, with an expected improvement of 2 percent year-on-year, despite having the third-highest coronavirus cases in the world.
In Argentina, high inflation and debt rates continue to pose challenges to the economy. Nevertheless, the construction sector has been witnessing a recovery, with its performance improving throughout the year. As a result, cement demand is expected to see a growth of 13 percent, driven by public investment in infrastructure.
Eastern Europe to see an increase in cement demand driven by Turkey
In Eastern Europe and CIS, cement demand is projected to grow more than 3 percent in 2021, lower than the 6 percent witnessed last year. Turkey is expected to grow by 8 percent this year, as the Turkish construction sector has been performing well.
Demand in Russia is set to continue increasing in 2021, with growth estimated at 4 percent, after increasing by 2 percent in 2020. Not only the global economic recovery but also the increase in oil and natural prices are expected to increase government revenues and support infrastructure spending helping drive demand growth.
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.