Global energy prices are under pressure due to the potential reclosure of Iran's Strait of Hormuz and the resumption of attacks by Houthi rebels in Yemen, raising concerns about the stability of the world oil supply chain. The domestic cement industry is also struggling with manufacturing cost burdens, prompting calls for urgent solutions.
On July 21, domestic cement companies, including Sampyo Cement, Ssangyong C&E, Hanil Cement, Asia Cement, Seongshin Yanghwa, and Halla Cement, emphasized the need to reduce their high dependence on imported energy sources such as coal and oil used in cement production.
The cement industry has been hit hard by rising energy costs. Harry Murphy Cruz, a global trade analyst from Oxford Economics, who attended the '2026 Cemtech Asia' conference in Bangkok last month, noted that while current oil prices are around $75 per barrel for Dubai crude, they could soar to between $130 and $160 per barrel if conflicts in the Middle East escalate or blockades persist.
There are also concerns that exports of liquefied natural gas (LNG) from Qatar could be disrupted. Major Asian countries import significant amounts of Qatari LNG, with South Korea at 15% and Singapore and India at 43%, primarily for power generation. An increase in LNG prices would directly impact electricity costs, thereby affecting cement manufacturing expenses.
The cement production process relies heavily on energy usage. Rising energy prices lead not only to increased fuel costs but also to higher logistics and insurance expenses. If global cement prices rise, it will inevitably lead to increased costs in the construction industry, potentially triggering a downturn that could further reduce construction investment and cement demand, creating a vicious cycle, industry experts warn.
The cement industry stated, "The surge in international energy prices is not just increasing manufacturing costs but is also pressuring the overall cost structure and the demand base for cement. Only companies that can effectively respond to coal and oil price fluctuations will survive."
To reduce dependence on foreign energy, the domestic cement industry is actively expanding the use of recycled resources such as waste plastics and tires, promoting eco-friendly power generation, and utilizing renewable energy.
A representative from the Cement Association remarked, "The retreat of domestic cement consumption to levels not seen in over 40 years, coinciding with a downturn in the construction market, is a serious warning. Given the low share of renewable energy, the domestic cement industry, including Sampyo Cement, must learn from the global cement industry's response strategies and expand the use of recycled resources necessary for carbon reduction to increase the fossil fuel substitution rate to 53% by 2035 and minimize dependence on foreign energy through eco-friendly power generation."
* This article has been translated by AI.
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