Price of cement

The price of cement does not experience significant supply pressure because limestone, the raw material from which cement is manufactured, is abundant worldwide. Therefore, price changes come as the result of fluctuations in demand for cement, which come primarily from the building and street construction industries. Almost all cement gets made into concrete, which is used extensively in construction. Both home and building construction experienced historic booms before the great financial crisis of 2008-2009. The high demand for concrete pushed the price of cement from $75 per metric ton (/MT) in 2003 to $104/MT in 2007.

The construction bubble then burst, drastically reducing the number of new construction projects. For example, housing starts dropped over 50.0% between 2007 and 2009. Construction projects are typically long-term, multiyear projects, with demand for cement from these projects remaining high in 2007 and 2008, keeping the price above $100/MT. However, the lack of new construction projects did catch up to cement prices in 2009 and 2010, when the composite price dropped 4.3% and 7.1%, respectively.

Following another price decline in 2011, the performance of construction industries started to reverse during 2012, with rising downstream demand causing cement prices to increase consistently from 2013 to 2015. Furthermore, increasing capacity utilization and demand for cement in the United States continued to push up cement prices steadily until 2019.

In 2020, the COVID-19 pandemic and the resulting economic results from it decelerated growth in the construction market due to lower demand for nonresidential construction. However, the strength in residential construction markets in 2020 helped boosted downstream markets, which in turn helped prevented cement prices from outright declining in the year. While the value of private nonresidential construction remained pressured in 2021 in part because of the tempered need for working spaces, the price of cement grew in the year. A reason for this is that the value of residential construction remained high in part because of lower interest rates and consumer confidence in the economy with the launching of the vaccines and the gradual lift of mandates at the time. In the same year, the passing of the Infrastructure Investment and Jobs Act helped pave the way for more funding directed at public projects like roadways, which keeps manufacturers pressured to meet increased demand in the period. Rising production costs in 2022 stemming from inflationary pressures are set to keep manufacturers pressured to operate without having to endure higher costs impeding in their operations. As a result, concrete prices increased 10.2% during 2022 and 7.1% in 2023. With high interest rates continuing during much of 2024, construction markets were pressured by low demand. Ultimately, concrete prices are set to lower grow at a significantly slower rate in 2024 and 2025.