Jake's View | What will happen to China’s cement production, 30 times that of the US, and steel production, five times that of the EU, if demand turns sour?

Beijing’s renewed emphasis on infrastructure investment will help boost industrial metals demand this year but the recent price rally has gone ahead of the fundamentals of an industry that needs to go through consolidation and excess capacity curtailment, according to analysts.

SCMP, March 14

Let’s allow the pictures to do the talking about excess capacity and then let’s see how much talk we need of curtailment rather than run and hide.

Here is the stunning stat for the day. At the peak of its cement production in 2014, China turned out more cement in just two years than the United States had produced in the previous century.

As the first chart shows, the trend finally topped out last year but it still indicates almost 30 times as much cement production in China as in the US, a much larger economy. Is this huge volume of cement really needed? Is this sustainable?

There is certainly an argument for more cement production in China than in the US, which has largely built its cities and its transport infrastructure. China is still in the process of doing so. Its cement requirements are thus proportionately much greater.

True, but 30 times as great with as much cement production in two years as the US recorded in 100 years? That’s pushing things.