Displaying items by tag: South Korea

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: Cement exports are expected to reach 4.5Mt in 2025, up by 52% year-on-year, according to the Korea Cement Association, as producers seek to offset weak domestic demand and rising raw material costs. Domestic shipments are projected to fall by 16.5% to 36.5Mt, the lowest level in 34 years.

Despite high transport costs and limited profitability, producers including Ssangyong C&E, Halla Cement and SAMPYO Cement are increasing exports to cover fixed costs and maintain kiln operations to retain carbon emission allowances.

A cement industry official said “The domestic economy is as bad as during the global financial crisis, but we cannot stop the plants, so we are sending the cement piling up overseas. On top of that, we need to keep the plant kilns running to maintain a minimum allocation of carbon emission allowances, so the goal is also to secure at least fixed costs.”

Another official said “Ssangyong C&E, Halla Cement and SAMPYO Cement have plants on the coast, so their transportation expenses are lower than those of corporations located inland. For inland companies, transportation costs double when you add ocean freight to land shipping, so it is difficult even to choose exports as a stopgap measure.”

Halla Cement increased exports by 63% year-on-year, expanding sales beyond Latin America into African markets including Cameroon and Guinea. SAMPYO Cement also signed new export contracts with South America in the second quarter of 2025. The Korea Cement Association forecasts 2026 demand will fall further to 36Mt, down by 1.3% from 2025, citing continued stagnation in the domestic construction sector.

South Korea: Gangwon-do governor Kim Jin-tae visited Halla Cement’s Gangneung Okgye plant on 13 November 2025 to discuss challenges facing the cement industry amid the country’s ongoing construction slowdown. Governor Kim reviewed progress on the government’s US$682m carbon capture and utilisation (CCU) ‘mega’ project, which aims to capture carbon dioxide from cement plants in Gangneung and Samcheok, as well as nearby coal-fired power plants. The captured CO₂ will be converted into e-methanol for eco-friendly ship fuel, lithium carbonate for secondary batteries, and new construction materials.

Kim said that Gangwon-do’s cement production accounts for 63% of nationwide production. He pledged full administrative support to ensure the project passes its preliminary feasibility study, according to local press. Halla Cement’s Okgye plant has only operated three of its four production lines since 2024, each producing 5500t/day of cement, after reducing output due to weak construction demand.

“There have been some concerns over dust and fine particles,” Kim said. “Cement and power companies have voluntarily signed an agreement to reduce emissions by 46%, and a second reduction agreement will be signed this month. As the industry continues its efforts, the province will actively support it by significantly reducing emission charges.”

South Korea: The Korea Cement Association, whose members include Sampyo Cement, Ssangyong C&E, Hanil Cement, Asia Cement, Halla Cement and Sungshin Cement, reported that domestic cement demand in 2025 is expected to reach 36.5Mt, down by 16.5% year-on-year, marking the lowest level since 1991, at 37.1Mt. Next year’s forecast indicates continued stagnation, with demand projected to decline a further 1% to around 36Mt.

According to the association, the country’s cement production peaked at 61.8Mt in 1997 before plunging to 44.6Mt during the 1998 financial crisis. Although production recovered to 56.71Mt by 2017, demand has since fallen by nearly 20Mt in just eight years.

An association official said, “While the sharp decline in domestic demand is quite shocking in numerical terms, the early 1990s were a period when the industry’s production capacity was 42.1Mt/yr, and cement domestic demand was rapidly increasing due to new town construction projects being developed in the outskirts of the Seoul metropolitan area as part of national policy. Currently, production capacity has increased to 61Mt/yr, but domestic demand is plummeting, so considering the utilisation rate, there is an enormous difference beyond simple numerical comparison.”

Cement exports rose by 52% to 4.5Mt in 2025, while for 2026, domestic demand is projected at 36Mt and exports at 3.5Mt.

South Korea: Cement packaging will now be required to display information on waste materials used in production under the revised Waste Management Act, the Ministry of Climate, Energy and Environment has announced. The regulation mandates that packaging show the types and amounts of waste materials used as alternative raw materials. A ministry source said “The outer surface of the packaging will only display the types of waste materials input, and scanning the QR code will link to a detailed information page about heavy metals and other components.”

Combustible waste such as tyres is also used as kiln fuel. The ministry said that South Korea is the first country to legally require disclosure of the kinds of waste material used in cement. The government is also pursuing revisions to the Housing Act to ensure that the types of cement used in new buildings are publicly disclosed.

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 sales dropped by 17% year-on-year to 18.9Mt in the first six months of 2025, their lowest level in this period since 1992, according to the Korea Cement Association. After peaking at 26Mt in 2023, sales fell by 7.16Mt (27.5%) in two years, driven by a prolonged recession in the construction industry and reduced social overhead capital spending.

A Korea Cement Association official said “The sense of crisis in the cement industry is reaching its worst. Although we have already entered crisis management, it will be difficult to achieve results unless highly effective measures to stimulate the construction economy are introduced. We expect domestic cement sales this year to fall significantly below 40Mt.”

Domestic cement companies such as Sampyo Cement, Ssangyong C&E, Hanil Cement, Asia Cement and Sungshin Cement are expected to see their businesses deteriorate further when results are released in mid-August 2025. Strengthened environmental regulations are also adding pressure to the sector.

South Korea/Algeria: The Korea Cement Association and the Algerian Cement Industry Group (GICA) have signed a memorandum of understanding to expand cooperation following a delegation visit to the country, led by vice president Lee Chang-ki and Hanil Cement Dan-yang plant head Jeon Jae-cheol. Chosun Biz news reported that Algeria ‘requested for help’ from Korea, and that the Ministry of Trade, Industry and Energy promoted the resumption of the Korea-Algeria economic Joint Committee meetings, which had been suspended since 2007.

Lee Chang-ki announced the ‘2050 Carbon Neutral Strategy for the Korean Cement Industry’, and the parties had the opportunity to visit Algerian cement plants and discuss future cooperation. The two parties agreed to form an operating committee to oversee implementation over the next two years.

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."