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The global cement market was valued at US$328.73 billion in 2021, and is expected to be worth US$443.06 billion in 2027. Cement is a substance which binds together other materials by a combination of chemical processes collectively known as setting. Cement is a dry powder and should not be confused with concretes or mortars, but it is an important constituent of both of these materials, in which it acts as the 'glue' that gives strength to structures. Mortar is a mixture of cement and sand whereas concrete also includes rough aggregates. Because it is a major component of both of these building materials, cement is an extremely important construction material.
The global cement production in 2021 was recorded at 4.37 billion ton whereas the consumption was 4.27 billion ton. Cement is used in the production of the many structures that make up the modern world including buildings, bridges, harbors, runways and roads. It is also used for facades and other decorative features on buildings. The constant demand for all of these structures, increasingly from the developing world, means that cement is the second most consumed commodity in the world after water. The global cement market is determined to grow at a CAGR of 5.10% over the forecasted period of 2022-2027.
Market Segmentation Analysis:
By Type: The report identifies three segments on the basis of type: Blended, Portland and Ohers. The blended segment held the largest market share (more than 55%) in 2021 due to features such as reduced water demand, improved workability and pump ability, and reduced crack formation due to thermal stress. The blended segment consists of base portland in which other materials, such as limestone, slag, and pozzolana, are added to obtain the different blends. The demand for blended types from industries like mining, building construction, and road construction is expected to increase, which would boost the market for the blended segment in coming years.
By Application: The report identifies two segments on the basis of application: Non Residential and Residential. The non-residential segment is expected to be the most dominant segment throughout the forecast period. This market segment uses the cement products for tasks like building stadiums, commercial complexes, industrial buildings, roads, dams, and transportation hubs. The demand for the product has increased as a result of growing urbanisation and infrastructure development. Additionally, the market is anticipated to grow due to the high demand for hospitals and schools.
By Region: In the report, the global cement market by production is divided into four regions: Asia Pacific, Europe, The US, and ROW. Asia Pacific accounted for the maximum share of more than 70% of the global production in 2021. Four of the top ten cement producers in the world are from Asia: China, Vietnam, India, and Indonesia. In contrast to China, where most of the locally produced cement is consumed, Vietnam exports a large portion of its cement, with the construction industry receiving the majority of the supply.
The global cement market by consumption is divided into five regions : Asia Pacific, Middle East & Africa, Europe, North America, and Latin America. Asia Pacific held the major share of around 74% of the global cement consumption in 2021. Rapid urbanization, growing construction activities and government infrastructure programs have all supported the growth of the market over the past years. The announcement of significant construction projects in the Asia-Pacific region has given rise to optimism about a steady increase in cement demand in the near future.
Significant growth is predicted for the Middle East and Africa region. This growth is attributed to the product's rising demand as a result of the region's expanding infrastructure-related activities. Another factor influencing the Middle East & Africa market is its use in mining and oil exploration activities.
Market Dynamics:
Growth Drivers: One of the key drivers of the market's expansion is the surging demand from construction activities. A significant increase in construction activities due to widespread industrialization is driving the global cement market growth. Both, residential and commercial construction activities are rising globally, owing to expanding urbanization along with the development of mega infrastructure projects, especially in emerging economies. This is leading to increasing consumption of cement and is creating a huge market demand across the world. Other significant growth factors of the market include, increasing adoption of green cement, rapid urbanization, rising disposable incomes and utilization of circulating resources.
Challenges: However, some challenges are impeding the growth of the market such as rising government regulations on carbon emissions from manufacturing plants, depleting fossil fuel reserves and higher power consumption. Cement is an essential construction material but its production process generates significant CO2 emissions. Two-thirds of these emissions are generated by the chemical transformation of the raw materials (process emissions), while the remaining third is linked to the energy used during the manufacturing process (combustion emissions). The cement industry generates 6-7% of the CO2 emitted globally. As cement is a meaningful contributor to global CO2 emissions, governments of various countries are imposing various environmental regulations over the production process to control the CO2 emissions from manufacturing plants. Hence, this is anticipated to restrain the market growth.
Trends: The market is projected to grow at a fast pace during the forecast period, due to growing civil engineering sector, technological advancements in the production process and surging infrastructure projects in developing regions. The construction sector in developing regions is expanding rapidly. A well established infrastructure sector represents the country’s economy and needs to match with rising pace of economic growth. The number of new infrastructure projects are increasing, with the growing economy of various developing countries such as India. Government bodies are taking initiatives to improve the status of their countries by improving the infrastructure sector. The increasing number infrastructure projects is thus propelling the demand for cement and other related products, contributing to the growth of the global cement market.
Impact Analysis of COVID-19 and Way Forward:
The COVID-19 pandemic has led to the temporary shutdown of production plants in several countries as well as the closure of construction sites. Several countries, including Italy, the US, and India, have witnessed curfew-like situations where businesses (except essential services) were not allowed to operate. As a consequence of halted construction activities, economic constraints, unavailability of raw materials and man power, the demand for cement declined. Thus, the outbreak of the COVID-19 pandemic has negatively impacted the global cement market.
However, the market regained the momentum as economic activities resumed and manufacturing activities started across the world. The COVID-19 pandemic clearly impacted volumes of heavy building materials last year, but only to a relatively modest extent due to the fact that governments quickly recognized the essential nature of the industry and permitted a rapid reopening of construction sites and their various suppliers.
Competitive Landscape:
The global cement market is moderately concentrated. The product is produced primarily in various parts of the world which has resulted in a more diverse market structure. In order to strengthen the market positions and propel the business growth, players with headquarters in North America and Europe are aiming to expand their presence in China and other countries in the Asia Pacific region. The market's major players have established robust regional presences, distribution networks, and product portfolios.
The key players in the global cement market are:
- UltraTech Cement Ltd.
- China National Building Material Company
- Cemex SAB de CV
- HeidelbergCement AG
- Anhui Conch Cement Co Ltd
- Holcim Ltd.
- China Resources Cement Holdings Limited
- Taiwan Cement Corporation
- China Shanshui Cement Group
- Huaxin Cement Co., Ltd.
- Votorantim Cementos
- Tangshan Jidong Cement Co.,Ltd
Key players are expected to increase their market presence and effectively meet the needs of their customers as a result of the strategies they have adopted, such as acquisition, the development of new products, and initiatives involving zero-carbon construction materials. For example, HeidelbergCement intends to produce CO2-neutral concrete by 2050. In June 2022, Ultratech Cement Ltd. declared that the company's board had approved to increase cement production capacity by 22.6 million tonnes annually by 2025. Holcim signed a contract in May 2022 allowing the Adani Group to buy the company's operations in India. The acquisition would include Holcim's 63.11% ownership of Ambuja Cement and 4.48% direct ownership of ACC. Heidelberg Cement, in June 2021, announced plans to convert the company's Slite factory in Sweden into the first carbon-neutral cement plant by 2030.