According to the Iranian Cement Association, Iran's cement sales in June were 5.36 million tons, a decrease of about 220000 tons compared with May, but still increased by 24.0% year-on-year. According to production data, Iran's cement and clinker production in June was 6.12 million tons and 6.76 million tons, respectively, with a year-on-year decline of 3.4% and 1.0%, respectively. In terms of foreign trade, Iran's cement and clinker exports totaled 1.01 million tons in June, down 11.1% from the same period last year. Among them, the export volume of cement was 510000 tons, an increase of about 3.0%, and the export volume of clinker decreased by 21.9% to 500000 tons. In the first half of
2024, Iran's cement consumption reached about 32.17 million tons, an increase of 9.8% over the previous year. During the period, Iran's cement production totaled 40.66 million tons, up 3.9% year-on-year, and clinker production was 37.99 million tons, up 4.0% year-on-year. In terms of foreign trade, the total export volume of cement and clinker was 6.59 million tons, a decrease of 5.2% over the same period last year. Among them, the export volume of cement reached 2.51 million tons, an increase of 9.1% over the previous year, and the export volume of clinker dropped to 4.09 million tons, a decrease of 12.3% over the previous year.
Following the 10.9% year-on-year growth in 2023, domestic demand in Iran's cement industry continued to grow strongly in the first half of 2024, and this growth trend is expected to further expand in the second half of 2024.
Despite a significant decline in clinker exports, cement exports showed strong growth. Iran's clinker exports have shown a downward trend since the peak at the end of 2022, which may reflect the sharp decline in Bangladesh's import demand. Bangladesh, Iraq, Kuwait and India are the main export markets of Iranian clinker. The
weak Iranian rial and strong growth in key export markets such as India will support Iranian cement export demand in 2024. Meanwhile, the Russian Cement Association pointed out that Iran accounted for 16.7% of Russia's total cement imports in 2023, an increase of 10.2% compared with 2021.
At present, Iran's urbanization process continues to advance, and the average annual population growth rate is stable at about 0.7%, but the impact of economic fundamentals on market prospects is mixed. In
2023, Iran's economic growth rate reached 5%, and according to the World Bank's forecast, Iran's economic growth rate will be around 3.2% in 2024. Meanwhile, Iran's unemployment rate fell to 8.1%, a record low.
However, an inflation rate of more than 40% is eroding the purchasing power of households and depressing the housing market. In addition, the high cost of mortgage loans and the limited scale of financing have further affected the market. According to local media reports, the volume of housing transactions in Tehran fell by 60% in 2023 compared with the same period last year, and the measures taken by the government to promote housing construction failed to achieve the desired results.
International economic sanctions and geopolitical tensions have further hampered economic development, especially considering that Russia, as the main source of overseas investment in Iran's construction and infrastructure sectors, has suffered difficulties that may destabilize some long-term projects and limit further investment in Iran's construction industry.
Nevertheless, public works with a budget of 3,000 trillion Iranian rials (more than $6 billion) as of March 2025 will continue to support the growth of cement demand in Iran in 2024. At this stage, government expenditure accounts for about 2/3 of Iran's total cement consumption. Against this backdrop, the cement industry remains exposed to downside risks in the event of a government revenue shortfall similar to that experienced in 2023 due to lower-than-expected oil revenues.
