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It’s been a sobering week for the cement sector in South Korea with the release of sales data for the first half of 2025.

Data from the Korea Cement Association (KCA) shows that local shipments of cement fell by 17% year-on-year to 18.8Mt in the first half of the year. The last time half-year output was reported to be below 20Mt was in 1992. The association noted that a ‘severe’ construction recession had continued from 2024. An uptick in demand for building materials is anticipated in the second half of 2025 due to postponed construction work but it is expected to be limited by a forthcoming government budget. The association said that output for the whole of 2025 is forecast to be “significantly below 40Mt unless effective construction stimulus measures are available.”

Graph 1: Cement shipments in South Korea, 2019 - 2025. Source: Korea Cement Association.

20Mt of cement output marks a dividing line in the South Korea-based market in recent decades. Previous economic low points over the last 30 years include the Asian Financial Crisis in the late 1990s and the 2008 financial crash triggered by the subprime market in the US. However, on neither occasion did half-year cement output in South Korea fall below 20Mt. The current situation is likely to be reflected in the financial results of the local manufacturers, when they are released later in August 2025, following poor first-quarter figures.

The general construction sector is facing a tough time, with construction companies facing a liquidity crunch as lending rules have been tightened. At the same time prices and labour costs are both reportedly up by 30% in the past three years. One reaction to this in Autumn 2024 was plans suggested by construction companies to import cement from China. This gained some support from the government, which said it was looking at ways to reduce costs, but then faced opposition in the National Assembly. It is unclear what has happened since then, although KCA figures show that imports of cement grew by 40% year-on-year to 384,000t in the second half of 2024.

The cement producers have reacted by shutting down production lines in some cases. In April 2025 local press reported that eight of the country’s 35 production lines had been shut down. Hanil Cement’s Danyang plant had reportedly suspended two of its six production lines. One additional kiln at Asia Cement’s Jecheon plant was preparing to be closed at this time, with the manager citing the difficulty of coping with a 70% capacity utilisation rate. This would have brought the site’s number of active lines down to two of four. Another unmentioned kiln also reportedly preparing to suspend operations would bring the total of inactive kilns up to 10.

As might be expected in this kind of business environment, mergers and acquisitions activity has started. Hanil Cement announced in mid-July 2025 that it was preparing to buy its subsidiary Hanil Hyundai Cement. The transaction is expected to cut costs of the newly combined company and yield other synergy effects.

With its high cement consumption per capita, the cement market in South Korea remains atypical compared to peer economies in East Asia and Europe. Consumption dropped after a peak in the 1990s but it remained high by international standards. Hence the outcry about a half-year cement output bigger than most European countries can manage in a year. The IMF predicts a gross domestic product (GDP) growth rate of 0.8% in 2025 in South Korea, with a faster pickup of 1.8% in 2026. Construction levels are expected to remain sluggish into autumn and start recovering in 2026. General market trends in developed countries suggest that cement consumption will fall further in South Korea in coming decades, especially as sustainability trends embed. Cement sales in Japan, for example, have gradually been dwindling since the late 1990s. One question here is whether the cement market in South Korea can continue to hold its high level of consumption per capita. It remains to be seen.

South Korea: Domestic cement sales dropped by 17% year-on-year to 18.9Mt in the first six months of 2025, their lowest level in this period since 1992, according to the Korea Cement Association. After peaking at 26Mt in 2023, sales fell by 7.16Mt (27.5%) in two years, driven by a prolonged recession in the construction industry and reduced social overhead capital spending.

A Korea Cement Association official said “The sense of crisis in the cement industry is reaching its worst. Although we have already entered crisis management, it will be difficult to achieve results unless highly effective measures to stimulate the construction economy are introduced. We expect domestic cement sales this year to fall significantly below 40Mt.”

Domestic cement companies such as Sampyo Cement, Ssangyong C&E, Hanil Cement, Asia Cement and Sungshin Cement are expected to see their businesses deteriorate further when results are released in mid-August 2025. Strengthened environmental regulations are also adding pressure to the sector.

South Korea/Algeria: The Korea Cement Association and the Algerian Cement Industry Group (GICA) have signed a memorandum of understanding to expand cooperation following a delegation visit to the country, led by vice president Lee Chang-ki and Hanil Cement Dan-yang plant head Jeon Jae-cheol. Chosun Biz news reported that Algeria ‘requested for help’ from Korea, and that the Ministry of Trade, Industry and Energy promoted the resumption of the Korea-Algeria economic Joint Committee meetings, which had been suspended since 2007.

Lee Chang-ki announced the ‘2050 Carbon Neutral Strategy for the Korean Cement Industry’, and the parties had the opportunity to visit Algerian cement plants and discuss future cooperation. The two parties agreed to form an operating committee to oversee implementation over the next two years.

South Korea: Domestic cement consumption fell by 22% year-on-year to 8.12Mt in the first quarter of 2025, the lowest figure for first-quarter sales in five years, according to Chosun Biz news. This marks a 32% (3.9Mt) drop from the 2023 peak of 12Mt. A domestic decline of more than 20% in the first quarter has not been seen since the 1998 financial crisis. At that time, first-quarter domestic sales decreased by 23% to 8.9Mt.

Cement companies have seen a corresponding decline in revenue. Hanil Cement’s operating profit dropped by 75% year-on-year to US$9m, Asia Cement’s fell by 70% year-on-year to US$2.4m and SAMPYO Cement’s declined by 90% to US$1.15m. Ssangyong C&E and Sungshin Cement both reported operating losses of US$19m and US$4.4m respectively.

A Cement Association representative said "For the time being, the decrease in domestic cement consumption is likely to continue, and management performance will further deteriorate. Unless a groundbreaking measure to overcome the construction market slump emerges, the forecast of 40Mt of domestic cement consumption in 2025 seems doubtful."

South Korea: Domestic cement shipments dropped by 25% year-on-year in January and February 2025 to 4.45Mt, with March expected to show a similar decline, according to the Korea Cement Association. If this trend continues, the Dong-a Ilbo newspaper reports that annual demand could fall to the 30Mt range, comparable to levels seen in the 1980s. 2024’s shipment volumes reached 44.2Mt, and a drop of more than 10% in 2025 would see this figure drop below the 40Mt threshold, not seen since 1991. The slump has been attributed to persistent structural issues in the construction sector, including a backlog of unsold regional housing.

A Korea Cement Association official said “The role of cement as a core pillar of national industrial growth has faded, leaving only a sense of crisis. This severe demand collapse is likely to persist for the foreseeable future.”

South Korea: Domestic cement sales fell by 25% year-on-year to 4.45Mt in the first two months of 2025, according to the Korea Cement Association. This is reportedly the lowest number recorded for domestic sales in January-February in the past five years. Sales during the same period in 2020–2022 exceeded 6Mt, and in 2023 reached 7.12Mt due to delayed post-Covid construction.

Producers have suspended eight of 35 production lines and may halt two more due to high inventories, which reached 3.4Mt at the end of February 2025, close to 90% of storage capacity.

A Korea Cement Association official said “Unless the construction economy recovers, the management crisis in the cement industry caused by the severe drop in demand will continue for the time being.”

South Korea: Jeon Geun-Sik, the CEO of Hanil Cement and Hanil Hyundai Cement, has been appointed as the president of the Korea Cement Association.

Geun-Sik started working for Hanil Cement in 1991, according to Chosun Daily. During his time with the company he has worked as the deputy head of the Danyang plant, head of corporate management planning, management head, senior vice president of Hanil Hyundai Cement headquarters and the CEO of Hanil Holdings. He has been the CEO of Hanil Cement and Hanil Hyundai Cement since 2022. Geun-Sik is a graduate of the Hanyang University in Seoul.

South Korea: The cement industry in South Korea faces rising costs due to a rising won-to-dollar exchange rate following the attempted impeachment of the president, and transportation disruptions from a railroad strike. This is likely to lead to an increase in coal import costs, according to Chosun Biz news.

The ongoing strike by the National Railroad Workers Union has disrupted cement transportation, though stockpiles in metropolitan areas have mitigated immediate effects. However, prolonged strikes could force production halts.

Kim Seung-jun, researcher at capital market company Hana Securities, said “In the fourth quarter, cement production is expected to decrease by 14% compared to the same period in 2023.”

South Korea: Due to high prices of cement, the government has announced plans to import Chinese cement, which is reportedly about 15% cheaper than domestically produced cement. The preparations to import it, including certification and the construction of storage warehouses, will take about two years.

South Korea: Ssangyong C&E has exported 30,000t of low-carbon limestone cement (Type IL) to the US, its first such shipment following three years of research and development, according to AJU News. The product reportedly has a reduced clinker content and maintains the same physical performance as general cement. The producer plans to export 200,000t to the US in 2024 and 600,000t in 2025.

A Ssangyong C&E official said "Currently, our country's national standards stipulate that mixed cement only uses slag, fly ash and pozzolan. In order to reduce carbon emissions in the future, conditions must be created where various types of eco-friendly cement, including limestone cement, can be used."