The construction industry accounts for around 95% of the gypsum consumed in the US. It is used to manufacture Portland cement and wallboard products, as well as to build plasters. As such, the declining housing and construction market has hit US gypsum production hard, with consumption of the mineral reported to have dropped by 20%.
However, the current recovery of the US housing market is likely to lead to improved demand for gypsum, according to a leading industry analyst. The prediction comes despite profitability in the industry falling during the second quarter of this year, due to declining utilisation rates and lower wallboard prices.
The industry is also predicted to improve in Europe through 2010 as the housing market follows in the positive footsteps of the US, sparking an increase in demand for plasterboard. However, the outlook for the emerging markets is not so clear.
Poor capacity utilisation
The wallboard industry in the US was estimated to have recorded capacity utilisation rates of just 49% during the second quarter of this year, according to USG estimates. This is a long way off Eagle Materials’s prediction of 90% utilisation that it feels to be necessary for the US wallboard industry to control pricing. Excess capacity is also likely to lower prices in the emerging market countries, while prices in Europe are likely to be significantly more stable due to the industry’s high concentration on the continent.
Gypsum is said to account for around 45% of Eagle Materials’s profit, while that figure is 11% for Saint-Gobain, and 3% for Lafarge.
Meanwhile, Saint-Gobain Gyproc India (SGGI) has announed a two year plan to double its turnover to
Rs.600 crore. The company aims to meet this target by increasing focus on its high-end products, such as gypsum-plasterboard-based drywall solutions. These offer a lighter alternative to brick and mortar walls and are also faster to construct.
Read the article online at: https://www.worldcement.com/the-americas/01102009/demand_for_gypsum_predicted_to_improve/