Cement: Cycles

How interest rates and public spending drive cement demand

There is no world price. The US average mill value rose from $127 per tonne in 2021 to about $160 in 2024 and 2025, a 26% rise. Demand tracks construction, which runs on interest rates and public spending. In 2025, US construction spending fell 1.8% in the first eight months while infrastructure-law funding kept flowing. Supply responds slowly. A new kiln takes years to permit and build, and closures in California, Maine and New York tightened capacity. China's falling output shows how a building boom can reverse.

US price, US average mill unit value

Super-cycles in cement

Cement has no world price because it rarely travels far, so its cycles are regional and follow construction. The great boom was China's: China made 4.9 billion t of cement in 2008-2010, more than the US used in the whole 20th century (Smil). That boom has turned into a slow bust, with Chinese output in 2025 at its lowest since 2010. India is now the growth market, but fast capacity additions have pushed prices down. In the US, tight capacity and import costs lifted prices about 26% in 2021-2025.

1. 2000s-2014

   Urbanisation, highways and high-speed rail made China the world's cement maker, with output doubling roughly every decade.

   China produced 4.9 Gt in 2008-2010 vs 4.56 Gt for the US in the entire 20th century (Smil); no world price series.

2. 2021-2025 (China)

   The property slump cut demand; Anhui Conch's 2024 revenue fell 35.5% on 7.5% lower volume amid falling prices (CemNet).

   China output fell to 1.693 billion t in 2025, the lowest since 2010 (SunSirs); July 2025 output of 146 Mt was the lowest month since 2009 (Global Cement).

3. 2021-2025 (US)

   Plant closures and idle capacity kept the US 19-22% import reliant while infrastructure funding supported demand.

   US average mill value $127/t (2021), $139 (2022), $152 (2023), $160 (2024 and 2025) (USGS).

4. FY2023-FY2025 (India)

   Capacity additions and consolidation-driven competition outran demand growth, cutting prices even as volumes rose.

   Average price Rs 375 per 50 kg bag (FY2023), Rs 365 (FY2024), Rs 340 (FY2025) (ICRA via Business Standard).

What drives the cycle

• Construction and infrastructure spending. Concrete is the main end use; housing, roads and public works set demand.
• Property cycles, especially China's. China is about 45% of world output, so its housing market sets the world total.
• Capacity additions and consolidation. Kilns take years to build; overbuild depresses prices, as in India in FY2024-FY2025.
• Fuel and power costs. Coal, petcoke and electricity are a large part of cash cost.
• Carbon policy. Carbon prices and border adjustments raise costs for high-clinker cement and favour blending.

Metrics to track