Cement consumption in Russia collapsed by 24%
Cement consumption in Russia has started to decline - in December it decreased by 24%. Such data was reported to Izvestia by the Union of Cement Producers. They noted that the overall year-on-year growth amounted to 3%, but this figure is deceptive.
"Almost all the growth came in the first half of 2024 and is provided by the reserve of previous years, gained high rates of construction after the active launch of new projects by developers in 2020-2023. Under the conditions of cancellation of the preferential mortgage program in July and the growth of the key rate of the Central Bank of the Russian Federation in October 2024, the decrease in consumption reached 21% and became progressive, and this trend is only increasing," Denis Usoltsev, Director of the Marketing and Strategic Analysis Department of CEMROS (the company is a member of the Union of Cement Producers), explained to Izvestia.
According to him, it can be stated that the cement market is entering a full-fledged recession.
"As for the time of trend reversal, it is difficult to define specific terms, however, taking into account the cyclicality and inertia of the construction industry, the long construction cycle of building erection, as well as historical retrospective, a full-fledged break of the negative trend should be expected not earlier than 2026-2027," Denis Usoltsev explained.
He also noted that during 2024 the demand for cement was supported by the need to supply current construction projects. However, as the main construction works on the projects launched in 2021-2023 are completed, the most likely scenario is a progressive reduction in cement purchases, and if the crisis scenario is realized, annual cement consumption may decrease by 25% year-on-year.
On January 21, co-owner and managing partner of Technonikol Sergey Kolesnikov suggested that in 2025 the Russian building materials market will experience price stagnation. According to him, further price decline is impossible because costs are accumulating. He noted the planned indexation of wages, drew attention to the rising cost of gas, electricity and tax increases.
