Coronavirus is not just a pandemic, it is also a fast-growing cancer on economies, particularly those that are weaker and already struggling. Lockdowns and curfews have shut down industrial shops and markets. The crows are cackling sounds of despair. Cement, much like other manufacturing industries is facing a global slaughtering.
Tighter and more restrictive lockdowns and protocols have resulted in a greater shrinking in output and demand. Whereas those economies that opted for a more relaxed form of a lockdown (such as Japan), - where industries and manufacturing hubs were still left open - saw a slower negative impact. But even as plants are re-opened and lockdowns are relaxed now across many countries, expectations for a full or even partial recovery in many economies seems too optimistic.
India, one of the largest cement manufacturers in the world, has witnessed an 86 percent drop in production in June. China has seen a drop of 30 percent - though during peak lockdown, the rate of decline was much closer to India. UK is predicted to see a 25 percent drop in construction demand, by the time 2020 ends. Several East Asian and European economies are not far behind. Whether growth in the global industry will stabilize and when will depend on demand which will come through private investment and governments’ development commitments. China for instance is already accelerating infrastructure and public service projects and announcing investment plans for the coming year. Municipal construction and housing have also already started to pick up.
However, demand may stagnate in more vulnerable economies (southern and eastern Africa) where consumption has been significantly hurt. This will affect global exporters in turn. It may also lead to a greater level of protection from imports especially where smaller indigenous industries are already operating.
Markets may also be disrupted due to the different paces at which Covid-19 is spreading and being subsequently addressed through restrictive measures. Inventory build ups may propel prices to drop significantly though experts warn that producers should keep tight and brace for a storm until such time that demand begins to gain some semblance of normalcy - which it will, though predictably not soon enough.
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