In the first quarter of this year, domestic cement consumption dropped by over 20%. As the construction market continues to slump, the cement industry, a downstream sector, has also fallen into a domestic recession.
The Korea Cement Association announced on the 16th that domestic cement consumption in the first quarter fell by 21.8% year-on-year to 8.12 million tons. This is the lowest figure for first-quarter domestic sales in the last five years. Compared to the peak demand of 12.01 million tons in 2023, there is a decrease of 32.4% (3.89 million tons).
Cement companies believe that the recent domestic slump is more severe than during the COVID-19 pandemic and the global economic recession that occurred in 2020. The domestic decrease rate in 2020 was only 5.7%. The occurrence of a domestic decrease rate reaching the 20% range in the first quarter is the first since immediately after the 1998 financial crisis. At that time, first-quarter domestic sales decreased by 23.1% to 8.86 million tons, falling below 10 million tons.
Due to the worsening domestic situation, cement companies have seen a decline in revenue. According to the first-quarter management performance (on a consolidated income statement basis) of major cement companies, Hanil Cement reported an operating profit of 12.54838 billion won, a decrease of 75.5% compared to the previous year. Asia Cement's profit plummeted to 3.4 billion won, a 70.4% drop from the previous year.
SAMPYO Cement also reported an operating profit of 1.62021 billion won, down 89.5%. Ssangyong C&E and Sungshin Cement recorded operating losses of 26.5 billion won and 6.1 billion won, respectively, marking a shift to deficits.
A representative from the Cement Association noted, "For the time being, the decrease in domestic cement consumption is likely to continue, and management performance will further deteriorate," adding, "Unless a groundbreaking measure to overcome the construction market slump emerges, the forecast of 40 million tons of domestic cement consumption this year seems doubtful."