Cement 2025 – Uneven Recovery

The Cement 2025 research report, published by IA Cement in London, offers a comprehensive look at expected trends in 2025. The report provides a detailed outlook at consumption prospects around the world, as well as a review of key risks, competitive pressures, and trading flows. It examines the world’s leading producers and analyses the key topics of carbon emissions and the potential impact of the incoming Trump administration. This article presents a summary from the report, analysing 2025 demand prospects by region.

Global cement consumption is languishing 9% below the pre-pandemic level. Around half of this deterioration has taken place in 2024. Key drivers have been high interest rates, the downturn in Chinese real estate, and weaker demand in mature markets. Profit margins have generally improved, aided by stable pricing and lower input costs.

In 2025 a mild recovery in global cement consumption is predicted, in the range of 1 – 2% excluding China. GDP is described by the IMF as “stable yet underwhelming”. Interest rate cuts are expected to trigger a revival in housing demand, with economists looking for 100 – 150 basis points in the benchmark US rate by the end of 2025. Fewer elections should result in lower political uncertainty, although the risk of tariffs under the incoming Trump administration is a substantial threat. Cement consumption is expected to recover in both Western Europe and the US, driven by improved housing demand. China is forecast to decline at a more modest pace. India is undergoing a slowdown post-election. In other regions, demand growth is predicted to be uneven. Seaborne trading markets struggled yet again in 2024, due to falling demand in key importing countries. Lower interest rates are expected to boost volumes in 2025, albeit from a depressed base. Export prices are projected to recover as market demand improves. Ultimately, the extent of the recovery will hinge on how long the turmoil lasts in the key import market of Bangladesh.

Western Europe – much-awaited recovery

After three years of decline, a modest recovery in cement consumption is predicted. Falling interest rates have already stabilised a number of housing markets, and the ECB is expected to cut rates more sharply than elsewhere. EU recovery funds have been disbursed slowly to date, leaving plenty of potential for 2025.

Germany is expected to go to elections in the coming weeks, which may bring an end to its political paralysis. The housing market has collapsed in the last two years and is expected to bottom out in 2025, underpinned by rate cuts and the Growth Opportunity Act. Public works may improve over the medium term if the new government amends the debt-brake. The UK and France have both raised taxes dramatically, shredding confidence in the private sector. This is expected to hamper the cement demand recovery. Italy is predicted to maintain a steady growth, with reduced renovation subsidies offset by EU recovery funds. Spanish cement consumption has recently turned around, and is expected to experience a solid year driven by rate cuts and immigration. Nordic markets have endured a tough two years in cement consumption, and are forecast to recover in 2025.

Eastern Europe – downturn in Russia

Central European countries are well on the road to recovery, as interest rates have already dropped substantially from their peaks. EU funding has resumed to Poland, the Czech Republic has emerged from stagnation, while Hungary is slightly lagging behind due to high inflation. The US election result raises the possibility of a resolution to the long-running Russia-Ukraine conflict. Russia has raised interest rates significantly to curb inflation, which is likely to result in a sharp drop in cement demand in 2025.

US – bouncing back

The US cement market endured a difficult 2024 due to a weak housing market and poor weather. This provides an easy base for 2025, which is expected to grow 3% as demand increases across all segments. Rate cuts are projected to revive the residential market, tax cuts will boost business confidence and public works are forecast to increase under the infrastructure bill. We assume the incoming administration will not fully deliver on plans for tariffs and mass deportations, which would have a significant negative economic impact. The decarbonisation of the cement sector is much more likely to run into headwinds, however.

Latin America – modest growth

The cement market in Latin America is expected to improve at a modest pace in 2025. Argentina is recovering from the economic shock treatment of President Milei, during which public spending and cement demand fell sharply. A rebound is predicted in 2025 as the economy stabilises. Demand in Colombia has fallen due to high interest rates, delayed public works, and an overhaul of the housing subsidy. A gradual turnaround is predicted next year. In Brazil interest rates are increasing as authorities try to curb inflation and prop up a weak currency. Changes to home financing rules have further squeezed the housing market. As a result, growth is forecast to be modest at 2% in 2025. The Mexican cement market faces a number of headwinds. The first year of a new administration is likely to affect public works, while negotiations with the incoming US administration could impact tariffs, nearshoring, and migration.

Middle East – solid prospects

Regional demand is expected to increase 2% in 2025, helped by rate cuts and mega projects in the Saudi market. Oil prices are forecast to be relatively flat due to growing supply. Iraq is expected to enjoy strong growth in cement demand due to high public spending, but fiscal pressures are rising and reforms will be necessary in the medium term. The UAE property boom is going from strength to strength. Higher supply is currently unable to satiate robust demand. The Saudi cement market finally returned to growth in H2 2024. Consumption is expected to improve 3 – 4% in 2025, driven by construction work on mega projects, tourism expansion, and a revival in housing. In Türkiye demand growth remained strong in 2024, driven by earthquake reconstruction. In 2025 we expect interest rate cuts and higher public works to lead to a 2 – 3% growth in cement demand.

Africa – broad-based growth

Cement demand in Africa is expected to increase 2 – 3% in both 2024 and 2025. Although inflation is elevated in some markets, interest rates are expected to decline and lead to higher housing demand. Strong growth is forecast in Algeria, driven by robust government spending. A recovery is predicted in Egypt, with real estate making a comeback despite a tough economic backdrop. After years of stagnation, South Africa is poised for a solid economic rebound. The perennial problem of load-shedding has been fixed and the new coalition has begun to turn around the economy. Kenya continues to face headwinds, although lower interest rates are expected to pave the way for a stabilisation. Nigerian demand is expected to slow in 2025 despite interest rate cuts.

China – not yet out-of-the-woods

The real estate market has fallen sharply again in 2024, resulting in a significant decline in cement consumption. Authorities have responded with a wide range of support measures, including efforts to tackle the long-standing problem of off-balance debt at the local government level. These have helped to stem the decline, but are unlikely to be enough to turn the sector around. As a result, cement demand is expected to drop again in 2025. Public works have increased at a gradual pace, which is not enough to offset the decline in housing. Imports have dried up and the country is again a net exporter of cement. Cement prices have recently picked up from their lows.

India – growth slowdown

Economic growth in India has continued to slow from the red-hot level of 2023. Infrastructure growth has already moderated after the Q2 2024 elections. The luxury housing segment is booming, while the wider market faces headwinds from elevated house prices and interest rates. Rural demand is projected to be solid, following ample rains in the last monsoon. Rapid capacity expansion has undermined the cement supply-demand balance, and selling prices are expected to be highly competitive. Demand growth is forecast to moderate to a 3 – 4% range in 2025.

Asia – mixed picture

Regional cement demand is down almost 10% since the pandemic. A slight recovery is anticipated in 2025, despite a number of markets in negative territory. The Philippines is expected to record solid demand growth, driven by lower interest rates and the Build Better More infrastructure plan. Cement producers are struggling with rising imports, which have undermined pricing and taken market share. Indonesia is expected to decline. While the new Prabowo administration plans to boost housing by cutting taxes, the infrastructure budget has been cut sharply. The Thai market has underperformed due to a six-month delay in budget approval. A solid cement growth is expected in 2025 based on easy comparisons and an improved housing outlook. Japan is predicted to be stable, as solid underlying demand is offset by labour bottlenecks and the end of construction for the Osaka Expo. Malaysia has been the regional star performer, with cement volumes and prices rising sharply in the last two years. A further year of strong growth is projected for 2025. Vietnam appears to have turned the corner after a brutal downturn in its real estate sector, paving the way for a solid demand recovery in 2025. Producers are struggling in the face of low selling prices and severe overcapacity. Bangladesh is expected to experience a sharp drop in 2025 demand. Many projects are on hold following the toppling of the government. Pakistani demand appears to be reaching a trough and is expected to recover in 2025 on the back of significant rate cuts.

Conclusions

After a difficult 2024, the industry can expect a year of uneven recovery in 2025 cement consumption. Excluding China, demand is projected to increase in the 1 – 2% range. The main driver is a drop in global interest rates, which will help to turnaround the battered real estate sector. Several of the largest global cement markets are expected to see falling demand in 2025. The incoming US administration presents a number of risks in the areas of tariffs, immigration, and decarbonisation. M&A is expected to remain active, as multinationals continue to explore disposals in emerging markets. Seaborne trading volumes are projected to improve, albeit from a depressed base.

Note

The full report is priced at US$680 from IA Cement.

Details are available at www.iacement.com or by emailing: publications@iacement.com

Read the article online at: https://www.worldcement.com/special-reports/09012025/cement-2025-uneven-recovery/