Displaying items by tag: Asia Cement

Asia Cement unveiled a selective catalytic reduction (SCR) unit at its Jecheon plant this week. The Korea Cement Association (KCA), government representatives and staff from other cement companies were present at a demonstration. The US$25m project has been supported by the Ministry of Industry and Trade. It was originally announced in late 2023, has been running on a pilot basis for two months, and is expected to start full operation shortly. The cement sector in South Korea will be subject to tighter emissions controls in mid-2027 and further SCR installations are expected.

Earlier in 2025 the KCA estimated that installing SCR units on all 35 active clinker production lines in the country would cost around US$675m with an additional annual running costs. One point to note here is that one of the local sector’s commonly used alternative fuels (AF), waste synthetic resin, impedes the SCR process. Subsequently, it has to be run at higher temperature, which increases running costs.

The local cement industry has faced a mixed response to its uptake of AF in recent years. One strand of this has been a movement against so-called ‘trash cement.’ This culminated in the Ministry of Climate, Energy and Environment amending the Waste Management Act in November 2025 to make it mandatory for cement products to disclose on the packaging the means to check which ‘waste’ materials were used in their manufacture. This appears to include both supplementary cementitious materials (SCM) and AF. The government is now intending to make it possible for citizens to check the type of cement used in newly-constructed buildings. The KCA reported that the share of blended cements (i.e. those made with SCMs) was 15% in 2024. The rate had gradually decreased over the last decade from 19% in 2015. South Korean cement producers had a AF co-processing rate of 35% in 2021. The main fuels being used in this way were waste synthetic resin, waste tires and waste rubber, with the first being used the most.

Graph 1: Cement sales in South Korea, 2019 - 2025. Source: Korea Cement Association.

Meanwhile, cement producers in South Korea have turned to exports in 2025 in response to poor construction levels and growing input costs. The KCA revealed this week to local press that exports are expected to grow by 52% year-on-year to 4.5Mt in 2025 from 3Mt in 2024. Local shipments, however, are anticipated to fall by 16.5% to 36.5Mt from 42.9Mt. Producers have focused their export strategies towards South America and Africa in response to competition in the export market in South-East Asia from China and Vietnam, producers. For example, Halla Cement started targeting Cameroon and Guinea in 2025 following previous favourite destinations such as Peru and Chile. Exports are still lower than they were in the mid-2010s. In 2015, for example, the country exported 7.3Mt of cement and clinker. However, the share of the share of exports to total sales is at its highest level for at least a decade.

The necessity of running kilns at certain levels rather than simply idling them has also emerged in recent reporting. The reason given was to “...maintain a minimum allocation of carbon emission allowances.” The detail is lacking but this may sound familiar to readers familiar with the European Union (EU) Emissions Trading Scheme (ETS). Following the financial crash in 2008, for example, an over-allocation of carbon credits enabled some producers to make money despite falling demand for cement. This is not to say that the same thing is happening in South Korea. Merely, that any ETS can potentially face structural issues in a declining market.

The South Korean cement market is facing tough times, with the KCA further anticipating a decline of 1.3% in 2026. Environmental regulations such as the new emissions controls are further putting up costs. One peculiarity of the local market is the scrutiny that the easiest routes to decarbonisation, SCAs and AFs, are facing. Giving the public the tools to check this kind of information is admirable. Yet it creates extra hurdles for a sector trying to decarbonise at the same time as a construction market construction. Good luck!

The Global CemFuels Asia Conference will take place on 2 - 3 February 2026 in Bangkok

South Korea: The Ministry of Environment has announced a pilot project to recycle waste fabric scraps from sewing factories into alternative fuel for the cement industry. The agreement has been signed with: textile companies Pang Rim, Sewang, Sinhan Spinning & Textile; cement companies Ssangyong C&E and Asia Cement; and the Korea Recycling Service Agency (KORA). It expands on an earlier initiative launched in 2024 with four Seoul districts.

Under the project, fabric scraps that were previously incinerated or landfilled will be separated, sorted and processed into intermediate fuel, which cement plants will use in the production process. The Ministry said that KORA will support raw material supply and recycling logistics, while cement firms will adopt the fabric-derived fuel to reduce waste and fossil fuel use.

Kim Go-eung, Director General of the Resources Circulation Bureau, said “The separation, sorting and recycling of waste are essential elements for producing high-quality recycled raw materials. To establish a circular system, we will continue to identify and expand various measures so that the supply of excellent recycled raw materials and the securing of demand sources can be balanced.”

It’s been a sobering week for the cement sector in South Korea with the release of sales data for the first half of 2025.

Data from the Korea Cement Association (KCA) shows that local shipments of cement fell by 17% year-on-year to 18.8Mt in the first half of the year. The last time half-year output was reported to be below 20Mt was in 1992. The association noted that a ‘severe’ construction recession had continued from 2024. An uptick in demand for building materials is anticipated in the second half of 2025 due to postponed construction work but it is expected to be limited by a forthcoming government budget. The association said that output for the whole of 2025 is forecast to be “significantly below 40Mt unless effective construction stimulus measures are available.”

Graph 1: Cement shipments in South Korea, 2019 - 2025. Source: Korea Cement Association.

20Mt of cement output marks a dividing line in the South Korea-based market in recent decades. Previous economic low points over the last 30 years include the Asian Financial Crisis in the late 1990s and the 2008 financial crash triggered by the subprime market in the US. However, on neither occasion did half-year cement output in South Korea fall below 20Mt. The current situation is likely to be reflected in the financial results of the local manufacturers, when they are released later in August 2025, following poor first-quarter figures.

The general construction sector is facing a tough time, with construction companies facing a liquidity crunch as lending rules have been tightened. At the same time prices and labour costs are both reportedly up by 30% in the past three years. One reaction to this in Autumn 2024 was plans suggested by construction companies to import cement from China. This gained some support from the government, which said it was looking at ways to reduce costs, but then faced opposition in the National Assembly. It is unclear what has happened since then, although KCA figures show that imports of cement grew by 40% year-on-year to 384,000t in the second half of 2024.

The cement producers have reacted by shutting down production lines in some cases. In April 2025 local press reported that eight of the country’s 35 production lines had been shut down. Hanil Cement’s Danyang plant had reportedly suspended two of its six production lines. One additional kiln at Asia Cement’s Jecheon plant was preparing to be closed at this time, with the manager citing the difficulty of coping with a 70% capacity utilisation rate. This would have brought the site’s number of active lines down to two of four. Another unmentioned kiln also reportedly preparing to suspend operations would bring the total of inactive kilns up to 10.

As might be expected in this kind of business environment, mergers and acquisitions activity has started. Hanil Cement announced in mid-July 2025 that it was preparing to buy its subsidiary Hanil Hyundai Cement. The transaction is expected to cut costs of the newly combined company and yield other synergy effects.

With its high cement consumption per capita, the cement market in South Korea remains atypical compared to peer economies in East Asia and Europe. Consumption dropped after a peak in the 1990s but it remained high by international standards. Hence the outcry about a half-year cement output bigger than most European countries can manage in a year. The IMF predicts a gross domestic product (GDP) growth rate of 0.8% in 2025 in South Korea, with a faster pickup of 1.8% in 2026. Construction levels are expected to remain sluggish into autumn and start recovering in 2026. General market trends in developed countries suggest that cement consumption will fall further in South Korea in coming decades, especially as sustainability trends embed. Cement sales in Japan, for example, have gradually been dwindling since the late 1990s. One question here is whether the cement market in South Korea can continue to hold its high level of consumption per capita. It remains to be seen.

South Korea: Domestic cement consumption fell by 22% year-on-year to 8.12Mt in the first quarter of 2025, the lowest figure for first-quarter sales in five years, according to Chosun Biz news. This marks a 32% (3.9Mt) drop from the 2023 peak of 12Mt. A domestic decline of more than 20% in the first quarter has not been seen since the 1998 financial crisis. At that time, first-quarter domestic sales decreased by 23% to 8.9Mt.

Cement companies have seen a corresponding decline in revenue. Hanil Cement’s operating profit dropped by 75% year-on-year to US$9m, Asia Cement’s fell by 70% year-on-year to US$2.4m and SAMPYO Cement’s declined by 90% to US$1.15m. Ssangyong C&E and Sungshin Cement both reported operating losses of US$19m and US$4.4m respectively.

A Cement Association representative said "For the time being, the decrease in domestic cement consumption is likely to continue, and management performance will further deteriorate. Unless a groundbreaking measure to overcome the construction market slump emerges, the forecast of 40Mt of domestic cement consumption in 2025 seems doubtful."

Sectoral adjustment continued for the cement industry in China in 2024. Now that the financial results from many of the larger China-based cement producers are out it gives Global Cement Weekly a chance to review the world’s biggest cement market. The decline in national output of cement accelerated in 2024 and the results showed this. CNBM summed up the situation as follows: “In 2024, affected by the reduction of real estate investment and the slowdown of infrastructure projects, the cement industry in China was caught in a situation of insufficient demand and aggravated overcapacity.” Output dropped by just under 10% year-on-year to 1.83Bnt in 2024 according to data from the National Bureau of Statistics of China (NBS). This is the fourth consecutive annual decline and the lowest figure the sector has experienced since around 2010.

Graph 1: Cement output in China, 2018 to 2024. Source: National Bureau of Statistics of China.

The China Cement Association’s (CCA) assessment concurred with CNBM. Although it detected a slowing in the decline in the second half of 2024, especially in the fourth quarter. It noted that the country has a production capacity of 1.81Bnt/yr and an estimated clinker utilisation rate of 53% in 2024. Note the large apparent difference this may suggest between the NBS and CCA figures. Data from the NBS for the first quarter of 2025 has shown a slowing of the decline. Output was 331Mt, a fall of just 1.7% year-on-year from the same period in 2023. The CCA’s prediction for 2025 is that cement demand will fall by 5% as the real estate market continues to deflate. However, it expects government-led capacity reduction schemes to start making progress.

Graph 2: Sales revenue from selected Chinese cement producers. Source: Company financial reports.

Graph 3: Sales volumes of cement and clinker from selected Chinese cement producers. Source: Company financial reports.

CNBM’s sales revenue fell by 14% to US$24.8bn in 2024. Sales of its Basic Building Materials segment fell by 23% to US$12.5bn. This was blamed on falling volumes and prices of cement and other heavy building materials. Sales from the group’s two other segments - New Materials and Engineering Technology Services - rose modestly but this wasn’t enough to hold up total group sales. Operating profit from the Basic Building Materials segment decreased by 45% to US$544m. It was a similar picture at Anhui Conch with sales revenue and net profit down by 36% to US$12.4bn and by 25% to US$1.01bn respectively. Notably, CNBM’s sales volumes of cement decreased by 21% to 245Mt in 2024 compared to a decrease of 6.5% to 268Mt by Anhui Conch. This made Anhui Conch the world’s biggest cement company by sales volumes in 2024.

Tangshan Jidong Cement and China Resources Building Materials Technology (CRBMT) both reported a similar situation. Revenue was down and a net loss was reported by the former. Both revenue and net profit were down for the latter. CRBMT said that its cement capacity utilisation rate was 69% in 2024, down from 71% in 2023. This appears to be significantly higher than the national rate mentioned above by the CCA but the company’s regional distribution may be at play here.

Following from recent years, Huaxin Cement bucked the general market trend and its revenue rose modestly to US$4.7bn in 2024. Its net profit still fell by 12.5% to US$330m. Its overseas businesses made the difference. It reported an increase of 37% to 16.2Mt in overseas cement sales with its non-China cement production capacity rising by 8% to 22.5Mt/yr. Milestones include various new or upgraded plant projects in Sub-Saharan Africa capped off by its announcement at the end of 2024 that it was preparing to buy Lafarge Africa. Other cement companies were also keen to promote overseas activity. CNBM said that the first signing of overseas merger and acquisition was achieved in 2024. This is likely to be the purchase of the Djebel El Oust cement plant in Tunisia from Votorantim Cimentos that was completed in late March 2025. Tangshan Jidong Cement acquired the remaining 40% share in South Africa-based Mamba Cement in April 2024.

All of this leaves the cement sector in China still waiting for the market to stabilise. US tariffs seem unlikely to have an effect in any meaningful way unless the general economy is altered. The declining real estate sector and cement production overcapacity are the main drivers at the national level. The CCA expects the real estate market to continue to fall in 2025 although it hopes that government remedy measures will start to show an effect. It is more optimistic about capacity reduction plans. One route towards this is through merger and acquisition activity. In a recent response to investors about industry integration, Huaxin Cement speculated that the sector might consolidate down to 30 companies from around 300 at present. There is clearly still a way to go.

Two news stories to note this week concerning climate legislation in eastern Asia. First, the Indonesian government announced plans to create a mandatory carbon emissions trading scheme (ETS) for key industries including cement. Second, an initiative to set up a carbon border adjustment mechanism (CBAM) in Taiwan emerged.

The proposal in Indonesia has been expected by the local cement sector and the wider market. Back in November 2024 at the ASEAN Federation of Cement Manufacturers (AFCM) event, an Indonesian Cement Association (ASI) speaker said that a preparation period for carbon trading by industrial sectors was expected from 2025 to 2027 followed by an easing-in period and then full implementation from 2031 onwards. This latest announcement appears to confirm the planned roll-out of the country’s cap-and-trade system. So far the government has set up a carbon tax, a voluntary carbon trading scheme (IDX Carbon) and a mandatory carbon trading scheme for part of the power sector. Notably, the local carbon price for that last one is low compared to other schemes elsewhere around the world. In 2024 the World Bank reported a price of US$0.61/t of CO₂. Since it only started in 2023 it is still early days yet though.

The new information confirms that the cement, fertiliser, steel and paper industries will be added to the mandatory emissions trading scheme. As per other cap-and-trade schemes, low emitters should be able to sell spare credits. However, comments made by Apit Pria Nugraha, Head of the Center for Green Industry, Ministry of Industry, at a recent trade event in Jakarta suggested that companies that emit more than their allowance would have to pay a 5% levy on the excess and buy credits for the rest. This seems to be different from the EU Emissions Trading Scheme, where companies are fined only if they go above their allowance and they do not buy sufficient credits to cover themselves. However, we’ll have to wait to confirm this and other details.

Meanwhile in Taiwan, Peng Chi-ming, the Minister of Environment, announced that a bill establishing a local CBAM could be prepared in the second half of 2025. What is telling though is how the local press coverage of this story framed the trade policy aspects of such a scheme. Peng questioned how the EU CBAM might fare in response to the protectionist and pro-tariff administration in the US. He also noted that importers of cement and steel didn’t have to disclose their carbon emissions compared to local producers. Vietnam, unsurprisingly, was singled out as a likely target of a CBAM given that one third of Taiwan’s imports of cement come from there. Lastly, Peng also said that Taiwan would have to apply to the World Trade Organization for approval if or when it did set up its own CBAM.

Taiwan introduced a carbon tax at the start of 2025 with a standard price of US$9.16/t of CO₂ and lower prices for companies using approved reduction plans or meeting technology benchmarks. Research by Reccessary indicated that Taiwan Cement might face a carbon tax bill of US$41m and Asia Cement could be looking at US$28m based on 2023 data. These additional costs will increase operating costs and reduce profits.

All of this may sound familiar because it has already happened in Europe. Some form of carbon trading or taxation is introduced and then the debate moves on to carbon leakage via imports. The cement industries in Indonesia and Taiwan are unlikely to be aggravated directly by the EU CBAM but the wider economies of both countries are reacting to secure access to export markets. This, in turn, has implications for a heavy CO₂-emitting sector like cement. For example, if a CBAM isn’t already being considered in Indonesia, local heavy industry is likely to start lobbying for one, if the new ETS starts affecting import rates.

The Minister of Environment in Taiwan and others before him have identified that climate policies can be protectionist. As more countries regulate local carbon emissions, more trade disputes look likely. The big one right now might be the growing argument between the US Trump administration and the EU. Yet, every time a country sets up a new carbon scheme, a potential new argument over trade is brewing. And cement producers in Indonesia, Taiwan and everywhere else are stuck in the middle of all of this.

Taiwan: Asia Cement Corporation (ACC) has published its inaugural Nature-Related Financial Disclosures Report for 2025. The report adopts the Task Force on Nature-Related Financial Disclosures’ framework to evaluate the nature-related impacts of ACC’s operations. It already publishes an annual Climate-Related Financial Disclosures Report.

Since 2020, ACC has invested US$21.5m initiatives aimed at promoting nature, including its successful rehabilitation of golden birdwing butterflies.

China/Taiwan: Asia Cement (China) Holdings will be taken private in a US$647m deal by its majority owner, Taiwan-listed Asia Cement Corp. Asia Cement Corp offers US$0.41 per share for the remaining stakes in its Hong Kong-based unit, marking a 3% discount on the last closing price. Trading in Asia Cement China shares, suspended since 28 May 2024 after a surge, will resume on 6 June 2024. The firm is impacted by China’s struggling property sector and recorded a first-quarter loss of approximately US$18m in April 2024.

Taiwan: Asia Cement Corporation won one gold and two bronze awards at the Taiwan Sustainable Action Awards 2023. The company’s Lighting Up the Beauty of the Tribe with Warmth and Heart outreach initiative won gold, while its Coping with Climate Change through Public-Private Collaboration contraband co-processing initiative and Promoting Low-Carbon Cement for a Better Net-Zero Scenario initiative for the development and application of low-carbon cement both won bronze.

Executive Vice President Doris Wu said “Every sustainable goal has corresponding action plans. Only through persistent endeavour, focus and work from all different perspectives can impossible tasks be turned into concrete objectives.”

South Korea: UK-based TCRK has announced a deal with Asia Cement to use its carbon capture and utilisation (CCU) technology at the cement producer’s plant in Jaechon. The project will see the first commercial deployment of TCRK’s CCUS technology from the first quarter of 2023. It will initially target 30,000t/yr of CO₂ equivalent and then ramp up to 120,000t/yr of CO₂ equivalent by mid-2024. The second target is intended to help Asia Cement reduce its emissions by 20% required to meet its 2025 decarbonisation plan.

TCRK’s approach will use two processes to utilise capture CO₂ from cement production. Its Arago Cement Process uses captured CO₂, cement kiln dust and by-pass particles to produce precipitated calcium carbonate, which TCRK uses to produce a product called Arago Cement. The captured CO₂ will also be used to grow microalgae in a process called bio-fixation. This method will offer 10% extra carbon storage capacity. The microalgae has a wide range of potential end-products including bioplastics and animal feed, and can also be used as a source of bio-cement production.