# Construction chemicals: Cycles

How China's property slump and India's boom pull opposite ways

Source page: https://www.materialinsights.org/chemicals/construction_chemicals/cycles/

How China's property slump and India's boom pull opposite ways What this tab covers How its prices and margins move: past booms and busts with price levels, the spread or margin that the industry watches, the drivers of the cycle and the metrics to track.

Prices of finished construction chemicals are not public, but revenue and margin cycles of listed companies show the pattern. Volumes follow concrete and building activity; prices follow raw materials with a lag, and leaders raise prices in inflation and keep most of them when costs fall. Margins dip when petrochemical inputs spike (2021-2022) and widen when they ease (2023-2025). The floor is set by infrastructure and repair demand; the ceiling by local formulators and cement companies' own brands. China's property collapse and the 2026 oil shock are the current tests.
 The spread to watch **Gross margin of listed formulators**

Pidilite's gross margin (54.3% in Q2 FY26) and Sika's EBITDA margin (18.4% in 2025; 19.2% before one-off costs) are the public gauges. No product spread is published.

#### Booms and busts

1. 2021-2022

Petrochemical inputs (VAM, acrylics, EO) spiked after COVID and the Ukraine war. Leaders raised prices several times; Indian retail players took a gross margin hit before price increases caught up.

not public; Pidilite gross margin fell sharply in FY2022-23 before recovering (indicative)

2. 2023-2025

Input costs eased while prices stuck, lifting margins. China's property slump cut volumes; Sika's Chinese construction sales fell by double digits in 2025.

Sika 2025 sales CHF 11.2 billion (-4.8% in CHF, +0.6% local currency), EBITDA margin 18.4%; Pidilite Q2 FY26 gross margin 54.3% vs 53.8% on lower input prices (Sika; Pidilite)

3. FY2026 (India)

Indian housing and infrastructure demand lifted volumes with stable input costs.

Pidilite FY26 revenue Rs 14,553 crore (+11.8%), underlying volume growth 11.1%, consolidated EBITDA margin 24.2% (Bajaj Broking)

4. 2026

The Hormuz near-closure lifted oil and naphtha prices, raising EO and acrylic costs. Sika still guided a 19.5-20.0% EBITDA margin for 2026.

Brent averaged $120.4/bbl in April 2026 against $71.1 in February (World Bank via crude oil tile); Sika 2026 outlook

#### What drives the cycle

- **Concrete and building volumes.** China's slump and Western flat markets offset India, the Middle East and data centres.
- **Petrochemical input costs.** EO, acrylic acid, VAM and bitumen move with oil and naphtha; pass-through lags one to two quarters.
- **Low-carbon concrete specifications.** Cement with more slag, fly ash and calcined clay needs more and better admixtures.
- **Consolidation.** Bolt-on acquisitions raise pricing power and spread R&D costs.

#### Metrics to track

| Metric | Why it matters | Where to track it |
|---|---|---|
| **Sika local-currency growth and EBITDA margin** | Global leader; reports by region | Sika results |
| **Pidilite underlying volume growth and gross margin** | India's best read of retail waterproofing and adhesives | Pidilite quarterly presentations |
| **Cement output by country** | Proxy for admixture volumes | USGS, CMA India, China NBS |
| **Ethylene oxide and acrylic acid prices** | Main PCE inputs | ICIS, Argus, Chemical Weekly |

## Other sections

- [Summary](https://www.materialinsights.org/chemicals/construction_chemicals/index.md)
- [Overview](https://www.materialinsights.org/chemicals/construction_chemicals/overview/index.md)
- [Correlation](https://www.materialinsights.org/chemicals/construction_chemicals/correlation/index.md)
- [Production route](https://www.materialinsights.org/chemicals/construction_chemicals/routes/index.md)
- [Production](https://www.materialinsights.org/chemicals/construction_chemicals/production/index.md)
- [Feedstocks](https://www.materialinsights.org/chemicals/construction_chemicals/feedstocks/index.md)
- [Trading](https://www.materialinsights.org/chemicals/construction_chemicals/trading/index.md)
- [Movement](https://www.materialinsights.org/chemicals/construction_chemicals/movement/index.md)
- [Regulation](https://www.materialinsights.org/chemicals/construction_chemicals/regulation/index.md)
- [Characteristics](https://www.materialinsights.org/chemicals/construction_chemicals/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/chemicals/construction_chemicals/emissions/index.md)
- [Relationships](https://www.materialinsights.org/chemicals/construction_chemicals/links/index.md)