The COVID-19 disaster triggered an upsurge in demand for cement and aggregates in the United States. But, the industry was largely geared to expanding its footprint and decreasing its lead in the market, rather than creating new markets. In addition to this, the sector’s efforts to introduce new products and processes, such as value-added concrete, were largely limited to the low-hanging fruit of small, regional markets. Meanwhile, age-old sales and distribution models were little changed. While many cement companies set up dispersed grinding facilities, most of them did not invest in the front-end logistics.
The second wave of Covid-19 negatively affected cement production in the United States. All-India cement production is expected to be down compared to April 2020. Despite the impact, however, most regions have imposed lockdowns due to the epidemic. Lockdowns also reduce the offtake of cement. The recovery from Covid-19 will take time and the offtake will be driven by overall pent-up demand once lockdowns ease.
The COVID pandemic made the industry extremely vulnerable to a sudden drop in demand. The cement industry has a global supply chain, but its output is over-capacity-ridden and highly diversified. The industry generates 5.4 percent of the world’s GDP and accounts for 7.7 percent of employment. But despite the overcapacity, the construction industry is still driving demand and is unlikely to slow down.