China’s cement industry growth is likely to moderate as pressure on local government finances drives a shift away from investment-led growth. Meanwhile, the cement industry faces stricter environmental controls, inefficient capacity elimination and restrictions on new projects. Against this backdrop, consolidation of supply is likely to accelerate. By Ben Hartwright, Standard Chartered Bank, Hong Kong.
Standard Chartered Bank (SCB) expects China’s cement industry to face a year of slowing demand expansion in 2014, moderated by slightly lower economic and credit growth. It forecasts cement demand to rise by around six per cent, compared to nearly 10 per cent in 2013. However, this should be offset by a decline in new capacity additions, particularly in the more developed coastal provinces. Overall, SCB anticipates clinker capacity to expand by just four per cent this year.
