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In 2013, global cement demand expanded 6.6% to 3.99 billion tons on surging Chinese demand, but growth will moderate 3.7%/year on average through 2018.
Even though we believe ex-China growth remaining positive beyond 2014, the shape of the growth curve flattened for the longer term as some of the largest cement markets, including India, Brazil, Saudi Arabia, and Indonesia, dial back. A major negative revision for 2014 was for Africa (2.5 percentage points lower), mostly driven by North Africa where countries, such as Egypt and Morocco, are still struggling to find footing, or continue seeing turbulence.
However, CW Research is more optimistic that Western Europe will manage to build support for a recovery in 2014: the area is the only region in the forecast that CW Group has upgraded (+0.5 percentage points) on benign core markets. Nonetheless, the region as a whole will still be in the red for 2014 on an overall 1%decline in cement consumption, the only region as a whole that is expected to contract in 2014.
Many pieces are still looking to gel in the global cement demand puzzle,” says Robert Madeira, CW Group managing director & head of research.
“Once again we reverted to economic and political fundamentals of countries in dissecting growth and revising our outlook; we are reminded that the Chinese political will to drive growth with shovel-ready initiatives is not to be underestimated, even though we believe the current trajectory remains unsustainable. Emerging markets, in defiance of economic coupling theories, largely disappointed which we see part of a general moderation in the near term.”
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