"Environmental Regulations Hit, Then COVID-19 Strikes... Cement Industry Faces 'Red Light'"

Domestic and Export Shipments Expected to Decline This Year
Cement Industry's Annual Events Even Uncertain
Reevaluation Inevitable if COVID-19 Prolongs

[Asia Economy Reporter Kim Daeseop] Amid a sharp decline in cement shipments due to the domestic construction industry's downturn, the spread of the novel coronavirus infection (COVID-19) has further clouded the prospects for the cement industry's annual internal and external events aimed at exploring sustainable growth strategies. With rising costs caused by strengthened environmental regulations starting this year, there are concerns about an overall crisis if COVID-19 prolongs.

According to the related industry on the 17th, domestic cement shipment volume is expected to be around 45.5 million tons this year due to the construction industry's slump. This represents a 6.0% decrease compared to last year's estimated 48.4 million tons. Domestic cement shipments have been declining annually since 2018 (51.24 million tons), after increasing from 55.76 million tons in 2016 to 56.71 million tons in 2017.

Exports are also on the decline. Although export volume increased from 5.44 million tons in 2018 to an estimated 6.3 million tons last year, it is expected to decrease to 5.6 million tons this year. Concerns include labor shortages at construction sites due to COVID-19 spread, increased logistics costs, and supply shortages of imported thermal coal fuel caused by deteriorating export-import conditions.

A cement industry official said, "There are concerns that the ongoing demand decline resembles the 1997 International Monetary Fund (IMF) foreign exchange crisis, and worries coexist that the real economy's sharp downturn due to COVID-19 could bring a massive crisis to the overall economy."

From this year, the cement industry faces significant cost increases due to strengthened environmental regulations such as nitrogen oxide emission charges and total pollutant emission caps in air quality management zones. Additional logistics costs are also inevitable due to the implementation of the freight vehicle safety fare system.

In this challenging situation, the holding of major industry events aimed at finding breakthroughs is also uncertain. The Korea Cement Association has scheduled its 57th anniversary celebration and the 47th Cement Symposium for June, but the spread of COVID-19 has prevented confirmation of whether the events will be held.

This event has been held annually ahead of the Cement Association's founding anniversary on July 1, with about 300 participants including executives and employees of major domestic cement companies and related academic figures. The industry has used the symposium each year to discuss research and development (R&D) for cement demand creation, climate change and environmental improvements such as greenhouse gas reduction, and cost reduction measures including cement facility improvements.

The holding of the 'Asia Cement Producers Friendship Council (ACPAC)' meeting, which involves seven Asian countries and is held annually, is also uncertain. The seven countries?Korea, Japan, Taiwan, the Philippines, Thailand, Indonesia, and Malaysia?hold meetings in each country every year, and this year it is Korea's turn.

Launched in 1973 as the 1st Korea-Taiwan Cement Producers Friendship Meeting, this meeting has evolved into a workshop attended by about 80 cement industry experts from the seven countries. The main agenda includes exchanging key economic, construction, and cement industry information among member countries, sharing supply-demand statistics and export-import data, and seeking mutual cooperation and development directions among trading countries.

An industry official said, "There are no plans to change the schedule yet," but added, "If the COVID-19 situation prolongs, a comprehensive review of the entire schedule will be inevitable."

This content was produced with the assistance of AI translation services.