South Korea’s home cement demand has plummeted to its lowest stage in 34 years. As the development business downturn continues, cement shipments have sharply declined to ranges seen within the early Nineties. Trade officers anticipate related sluggish efficiency to proceed subsequent 12 months, regardless of the federal government’s efforts to revive the development sector.
The Korea Cement Affiliation (together with Sampyo Cement, Ssangyong C&E, Hanil Cement, Asia Cement, Halla Cement, and Sungshin Cement) introduced on Nov. 11 that home cement demand (shipments) for 2025 is anticipated to achieve 36.5 million tons, a lower of 16.5% (7.21 million tons) from the earlier 12 months. This marks the bottom determine since 1991 (37.11 million tons).
Subsequent 12 months’s forecast additionally reveals a decline of 1.4% from this 12 months to round 36 million tons, basically indicating stagnation.
Based on the affiliation, South Korea’s cement business recorded its highest-ever efficiency of 61.75 million tons in 1997, however plummeted to 44.61 million tons throughout the 1998 monetary disaster. It recovered to 56.71 million tons by 2017, however has declined by practically 20 million tons in simply eight years, displaying the worst efficiency in historical past.
An affiliation official defined, “Whereas the sharp decline in home demand is kind of stunning in numerical phrases, the early Nineties had been a interval when the business’s manufacturing capability was 42.1 million tons, and cement home demand was quickly growing attributable to new city building initiatives being developed within the outskirts of the Seoul metropolitan space as a part of nationwide coverage.” The official added, “Presently, manufacturing capability has elevated to 61 million tons, however home demand is plummeting, so contemplating the utilization fee, there is a gigantic distinction past easy numerical comparability.”
The primary reason for the decline in cement home demand is the development business downturn. Building orders plummeted 18.9% in comparison with the earlier 12 months, whereas constructing groundbreaking and building completion decreased 12.8% and 18.1%, respectively. Social overhead capital (SOC) budgets have additionally been lowered lately, hindering demand restoration.
Nonetheless, the affiliation analyzed that subsequent 12 months’s cement demand forecast decline has been mitigated, reflecting the federal government’s execution coverage for SOC challenge budgets (27.5 trillion gained) and its dedication to increasing housing provide over the subsequent 5 years. Cement exports, then again, elevated 52% to 4.5 million tons, and for 2026, the affiliation expects home cement demand to be round 36 million tons and exports round 3.5 million tons.
In the meantime, rising logistics prices and strengthened greenhouse gasoline discount obligations pose further challenges. Throughout the momentary software interval of the freight truck secure freight fee system from 2020-2022, bulk cement trailer (BCT) transportation prices elevated by roughly 40%, leading to an extra burden of 120 billion gained over three years. Current authorities bulletins of the Nationally Decided Contribution (NDC) for 2035 assigned the cement sector a discount objective of 53-61% in comparison with 2018 ranges, elevating criticism concerning the lack of life like implementation measures.
An affiliation official acknowledged, “With the continued downward development in sharply declining cement demand and extra regulatory measures that weaken the business’s long-term competitiveness, we are going to face the worst administration scenario.”
