Cement demand to fall in China by 2020

By Albert Li, Yoke Wong
Published: Thursday, 27 October 2016

China's cement demand is set to fall, while flat glass consumption is to increase. Elsewhere the plans to double the country's high speed rail network should boost rare earths demand.

Cement demand in China is expected to fall yearly while flat glass and green materials consumption will grow by 2020, the Chinese Ministry of Industry and Information (MIIT) said on 11 October.  

"With the continuous change of economic development, the continuous upgrade of structural demand, the demand trend for traditional building materials will remain steady or fall slightly, especially demand for cement will decline," according to the MIIT’s development plan for the industry of building material.

Industrial minerals such as bauxite, limestone, calcium carbonate and clay are used to produce cement, while soda ash is a major component of glass.  

Cement clinker demand will fall 2% year-on-year from 2015 to 1.2bn tonnes by 2020, while flat glass consumption is expected to grow 1% y-o-y to 78m flat glass containers, which is approximately 39m tonnes, the development plan cited.

Ceramic tiles used in the building industry could fall 1% y-o-y to 9.5bn square metre in 2020, it added.  

Under the plan, the Chinese government will eliminate the severe overcapacity in the cement and flat glass industry, as well as developing a more sustainable construction industry. As part of the development plan, cement and flat glass production capacity expansion is prohibited before 2020.

MIIT also released an update on the elimination of outdated and excess capacity in China in October. Up to 13.78m tonnes of iron, 17.06m tonnes of steel, 49.74m tonnes of cement, 714,500 tonnes of flat glass, 1,67m tonnes of paper, 2.6m standard sheets of leather, 1.21m metres printing and dying industrial capacities were eliminated in 2015.

Extended rail network to boost rare earths demand

China’s plans to extend its national high-speed rail network and underground train system in main cities will boost demand for rare earth components such as neodymium-iron-boron (NdFeB) magnets used in locomotives.

According to the 2016 edition of the China Rail Network Plan, during 2016-2020 the country will extend its high speed rail network to 30,000km by 2020 and to 38,000km by 2025, effectively doubling total mileage in the next decade.

It also plans to build 4,248km of additional underground train lines throughout its main cities by 2020. After lowering the population requirements for the infrastructure, 90 cities now qualify for underground systems, up from 30 previously.

Electric tram networks are also expected to increase from 174km in 2015 to 2,500km in 2020 nationwide.

The additional networks will require an increased number of rail locomotives, which China aims to meet with vehicles that adopt the new traction system of permanent magnet motor, which uses NdFeB as a permanent magnet.

NdFeB helps energy saving, boosts efficiency of the traction system, has a lower weight than other material and higher noise reduction capabilities.

NdFeB demand is expected to rise on the back of the infrastructure plans, which would also affect rare earth elements like neodymium and dysprosium.

High speed trains in China such as this one use NdFeB magnets. (Image Source: Sharon Hahn Darlin, via Flickr)

Environmental uses

Environmental policies may also affect demand for rare earths.

At the Rare Earth Application and Environmental Technology Conference held in Zibo on 28 September, Meng Feng, deputy director of the rare earth source material department of the China Ministry of Industry and Information Technology, stated that China is making stricter policy guidelines for rare earth catalyst material development.

He stated that in the soon to be announced rare earth development plan 2016-2020, a key topic will be the usage of rare earths in environmental fields such as denitration in waste gas in kilns and vehicle exhaust purification. Applications including cerium-based catalysts and waste gas volatile organic compound (VOC) combustion catalyst technology are both listed as main directions of development.

Feng added that rare earth catalysts have become the fastest-growing application in rare earth materials as they are efficient, non-toxic and recyclable. In China, cerium oxide as light rare earth is mainly produced in Inner Mongolia but its price is lower than heavy rare earth produced in the south of the country.