China's Stimulus May Raise Cement Demand by 460 Million Tons

China, the world's largest cement consumer, may raise demand by 460 million metric tons because of spending on railways, airports and housing from the government's 4 trillion yuan ($586 billion) stimulus, an industry group said.

Cement demand may increase by 230 million tons a year for both 2009 and 2010, the China Cement Association said in a statement on its Web site today. The yearly increase represents 17 percent of 2007 consumption, the group said.

The Chinese government is boosting spending to revive growth in the world's fourth-largest economy. The economy grew 9 percent in the third quarter, the slowest in 5 years, because of a slump in property and export demand.

The government effort to boost fixed-asset investment will reverse a decline in cement consumption because of a slumping property market, the association said.

Each fixed-asset investment increase of 100 million yuan creates demand for 11,500 tons of cement, the association said, citing calculations based on 2007 statistics.

To contact the reporter on this story: Lee Spears in Beijing at lspears2@bloomberg.net.

To contact the editor responsible for this story: Teo Chian Wei at cwteo@bloomberg.net.

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