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Chinese cement markets

World Cement,

Though china is the largest cement market in the world, it is not immune to economic turbulence. As any market, it is subject to the ebb and flow of change. Earlier in 2012, China's economic planning body, the National Development and Reform Commission, revealed that it had given its approval to projects estimated to be worth more than CNY1 trillion (roughly US$1.5 billion) in order to stimulate infrastructure growth. To put this into context, this sum is around a quarter of the total size of the huge stimulus package injected into the economy in 2008 by the Chinese government in response to the global financial crisis. Although the benefits of these latest projects are yet to be felt, it is likely that an increase in demand is on the horizon.

It’s too early to see how the Chinese cement industry has performed over 2012, but with total revenues of US$130 billion in 2011, the market achieved compound annual growth rate (CAGR) of 19.1% between 2007 and 2011. While this does not meet pre-2008 performances CAGR-wise, the performance is far from slovenly. Likewise, consumption volumes across the market increased during this period, with a CAGR of 9.3%. Total consumption in 2011 reached a staggering 1.9 billion t of cement. With new capacities coming online all the time, and strong trend of process upgrades as companies fight to keep up with their competition, this can only grow further still.

However, analysts predict that a deceleration of market performance is due, with an anticipated CAGR of 11.1% predicted over the five-year period from 2011 – 2016. Growth is growth though, and a value of around US$221 Billion is predicted million by the end of 2016.

Written by Jack Davidson.

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