September 01 / 2025
As a Construction Proxy, we have been following construction material market trends for more than 11 years. With our extensive historical data and analytical tools, we can fairly predict most material prices. However, cement has always been the exception—it remains one of the most unpredictable materials in Ethiopia’s construction market.
Global Cement Price Outlook (Q2 2025 – iMRC)
- USA: USD 96/MT ≈ 1,622 birr/quintal
- China: USD 54/MT ≈ 912 birr/quintal
- Germany: USD 229/MT ≈ 3,870 birr/quintal
- United Kingdom: USD 129/MT ≈ 2,180 birr/quintal
- Canada: USD 157/MT ≈ 2,658 birr/quintal
(Based on April 2025 exchange rate of 130 birr/USD)
At first glance, Ethiopia’s cement prices may seem cheaper compared to these markets. But the story isn’t that simple. Let’s explore what drives cement prices in these countries:
- USA: Relatively average, driven by expensive energy and supply limitations.
- Germany: High energy costs, strict environmental regulations, and overutilized quarries limit raw material availability.
- UK: Expensive labor, post-Brexit trade impacts, and strong demand.
- Canada: Harsh climate requiring specialized additives, combined with costly energy and environmental levies.
Globally, the main cost drivers are raw materials, energy, and labor, with energy being by far the most influential factor.
Ethiopia’s Case: Beyond Energy Costs
Unlike the global market, Ethiopia’s cement price shifts have not been directly tied to energy, fuel, or macroeconomic reforms. Instead, two unique local factors stand out:
1. Government Policy
Three years ago, mega projects submitted their cement demand to the Ministry, which allocated quotas to factories. This system created inefficiency and pushed the market to the verge of collapse. Recently, policy changes helped reduce cement prices from 2,200 birr/quintal to around 1,200 birr/quintal.
2. The Role of “Delalas” (Middlemen)
Due to strict government control, storing cement without permits risked arrest—cement became almost like a controlled substance. Brokers, or delalas, exploited the system, offering access to cement while inflating costs. Eventually, government crackdowns reduced their dominance, easing distribution bottlenecks.
The Demand Side: Supply and Projects
Cement demand in Ethiopia does not always follow traditional supply-demand economics.
- Mega Projects: The GERD alone consumed around 1.04 million tons of cement over a decade. Yet, since 2023, demand from such mega projects has slowed.
- Infrastructure and Roads: Road construction, once a major cement consumer, declined due to conflict and reduced public investment.
- Market Stabilization: The entrance of Lemi Cement Factory, which produces 10,000 tons per day, significantly stabilized the supply in Addis Ababa, easing shortages and pushing prices down.
What’s next?
Cement prices in Ethiopia remain highly sensitive to policy decisions rather than energy or raw material costs. Without consistent and transparent regulation, price volatility is likely to return. A sustainable balance between government oversight, factory capacity, and fair market practices is essential to prevent another surge.