WCA: Cement Demand Growth to Slow in 2019


The World Cement Association (WCA) expects global cement demand growth to slow down next year, as the positive outlook and signs of recovery seen in the second half of 2016 have started to fade away in the face of rising downside risks emerging in the second quarter of 2018.

WCAlogoWCA forecasts that in 2019 world cement demand will grow by 1.5 percent. China’s dwindling needs are a significant factor, but even excluding this, overall demand will only rise by 2.8 percent in 2019, lagging the levels of global economic growth anticipated by the International Monetary Fund.

Escalating trade wars between the United States and China and its disruptive spillover will cause a serious setback for the global growth, said the association. Economic growth expectations have deteriorated in developed markets on the back of higher trade costs and tightening financial policies, as well as in major emerging markets due to higher borrowing costs, vulnerable exchange rates and reduced capital inflow.

In 2019, WCA expects the U.S. cement market will grow at a moderate pace, around 3 percent lower than in 2018, after an upside associated with the Trump administration’s large infrastructure investments failed to materialize.

In Latin America, Brazil might finally see growth in 2019 after their worst-ever recession since 2014 and a series of debilitating political crises, noted the association. While these events have caused Brazil’s cement market to shrink by more than 25 percent, in 2019 a strong rebound is predicted with growth increasing by 5 percent.

Overall, WCA forecasts indicate 2019 will be a year when the world cement market will see subdued demand, and the outlook is relatively weaker than 2017 and 2018. Together with existing global issues, a long-standing overcapacity problem in the industry and higher CO2 emission prices in the Eurozone, the year ahead will be a challenging one for many cement producers.

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