Market Challenges And Opportunities
Calcium Sulphate Market Drivers
- Growth in the construction industry: The construction industry is one of the largest consumers of calcium sulphate in the form of gypsum plaster and plasterboards. The global construction spending is expected to reach over US$15 trillion by 2030, driven by rapid urbanization and growth in infrastructure projects. Developing economies in Asia Pacific and Middle East & Africa are expected to account for 60% of the global construction spending by 2030. The rise in construction of residential and commercial buildings to accommodate the growing urban population will drive the demand for gypsum-based building materials like plasterboards. This presents significant growth opportunities for calcium sulphate manufacturers.
- Increasing agricultural production: Calcium sulphate is widely used in the agriculture industry as a soil amendment and fertilizer ingredient. It improves soil fertility and conditioning in areas with saline soil conditions. With the growing need to improve agricultural productivity and crop yield to meet the rising food demand, the consumption of gypsum in agriculture is increasing significantly. Gypsum application in soil prevents aluminum toxicity and makes nutrients readily available to plants. The demand for food grains like rice, wheat, corn, etc. is projected to increase by 15-25% by 2030, which will drive the adoption of gypsum in agriculture. For example, as per Food and Agriculture Organization estimates, the area under cultivation of important cash crops like sugar cane rose by 5% in India between 2020 and 2021. Similarly, wheat cultivation expanded in China, Russia, and U.S. during the same period. This has significantly boosted the demand for calcium sulphate from these countries.
- Growth of the cement industry: The cement industry accounts for a major share of the calcium sulphate demand. It is an important additive in the manufacturing of Portland cement where it regulates the setting time and aids the grinding process. According to industry estimates, the global cement production is expected to reach over 5 billion tons by 2030. Developing nations, such as India, Vietnam, and Africa, will drive this growth owing to large-scale infrastructure projects and housing demand. With cement production rising globally, the consumption of gypsum by cement manufacturers will also increase, in turn, fueling the growth of the calcium sulphate market.
- Rising demand from water treatment applications: Calcium sulphate is widely used in municipal water treatment plants for odor control. It is a cost-effective sulfur source and helps remove hydrogen sulfide from water. With deteriorating water quality and growing concerns over the provision of clean drinking water, municipalities are upgrading their water treatment infrastructure. The global municipal water treatment market is poised to grow at over 7% CAGR from 2022 to 2030 on account of rising investments in water treatment projects. This will substantially increase the adoption of calcium sulphate in water treatment applications.
Calcium Sulphate Market Opportunities
- Capacity expansions in Asia Pacific: Asia Pacific is the largest and fastest-growing calcium sulphate market globally. To capitalize on the increasing regional demand, manufacturers are significantly expanding their production capacities in countries like China, India, and Thailand. For instance, in 2021, Yoshino Gypsum announced capacity additions at its factory in Thailand to meet the rising demand. Such capacity expansions provide growth opportunities to calcium sulphate manufacturers in the cost-competitive Asia Pacific market. Local players are also expected to benefit from increasing their production capacities.
- Growing demand for recycled gypsum: Recycled gypsum produced from flue gas desulfurization (FGD) systems of coal-fired plants is gaining traction over natural gypsum. It has similar chemistry and purity as natural gypsum. Gypsum recyclers retrieve waste FGD gypsum from landfills and supply it to cement, agriculture, and gypsum board manufacturers. The availability of recycled gypsum provides cost benefits to end-users. Gypsum recycling also prevents landfilling of this useful material. The global flue gas desulfurization gypsum market is projected to grow at over 5% CAGR from 2023 to 2030, creating significant opportunities for calcium sulphate manufacturers.
- R&D for new product development: Manufacturers are investing in R&D activities to develop improved calcium sulphate products for various applications. For instance, acrylic-based gypsum plaster for enhanced water resistance or gypsum bonder plasters for tile fixing. The use of additives like polymers is being explored to improve product qualities. Manufacturers are also developing gypsum boards with additional properties like fire resistance and moisture control. The launch of such innovative products caters to changing customer needs, thereby presenting growth opportunities for manufacturers.
- Applications in 3D printing: Calcium sulphate hemihydrate, the key ingredient in plaster, has gained interest as a building material for 3D printing in construction. It is being used with naturally occurring minerals to develop 3D printed architectural structures. Calcium sulphate deposits provide uniform print quality and good interlayer adhesion. The global 3D printing construction market is projected to reach US$ 1.50 billion by 2030. The rise of 3D printing in construction creates new revenue possibilities for the calcium sulphate market.
Calcium Sulphate Market Restraints
- Environmental impacts of gypsum mining: Gypsum is a non-renewable mineral resource obtained through open-pit mining. Intensive gypsum mining can lead to air pollution, habitat destruction, groundwater table lowering, and soil erosion. Excessive gypsum extraction is not considered environmentally sustainable in the long run. Stringent mining regulations are being implemented in many countries regarding gypsum excavation and processing. Such unfavorable environmental impacts pose challenges for the growth of the calcium sulphate market. For instance, according to a study published by the UN Environment Programme in 2021, 64% of countries reported mining as a cause of increased pollution levels in rivers between 2018 and 2020.
- Health hazards of gypsum dust: Gypsum processing and use can result in exposure to powdered gypsum dust containing silica and sulfate. Prolonged exposure can cause lung diseases like silicosis and lung cancer. Workers involved in mining, crushing, plasterboard cutting are at high risk. Implementation of worker safety regulations in gypsum product manufacturing adds to costs for producers. Health hazards associated with gypsum dust restrict market growth to some extent. For instance, according to the World Health Organization, pneumoconiosis affected around 110 million people globally in 2020 with an annual incidence of 200,000 cases. Pneumoconiosis caused over 40,000 deaths worldwide in the same year.
- Transportation costs: As a mineral-based product, transportation and logistics costs are relatively high for calcium sulphate, impacting the overall cost for end users. It has low value-to-weight ratio. Transportation costs are substantial for companies manufacturing gypsum products at facilities far from gypsum quarries. End-use industries also incur considerable freight costs when calcium sulphate needs to be sourced from distant suppliers. Such high transportation costs hinder the adoption of calcium sulphate to some extent. For instance, according to data from the World Bank, transportation costs account for 10-15% of the total costs for many calcium sulphate producers globally. With fuel prices rising, transportation costs have been increasing annually, further squeezing margins.
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