Asian Gypsum Trade Trends

A review of imported gypsum market trends in Asia, South East Africa and the Middle East.

From 2007 to 2022, the main gypsum importers in Asia, south east Africa and the Middle East were India, Bangladesh, Indonesia, Malaysia, Vietnam, Philippines, Japan, South Korea and the UAE, as well as some south east African countries. They imported 239Mt of gypsum over 15 years, at a compound annual growth rate (CAGR) of ~6%. Of this, Oman supplied 73.1Mt (30.6%) of the gypsum imported. In 2022 the same region imported 19.96Mt of gypsum. Oman supplied 9.9Mt, 49.6% of the total.

Between 2023 and 2037 the same region is likely to demand as much as 444Mt at a CAGR of 5%. Even in the lowest growth scenario - with a CAGR of 1% - the imported gypsum demand will still be over 325Mt over this same period.

Gypsum export supply outlook

Table 1: Volumes of gypsum exported to countries in Asia, south east Africa and the Middle East - by various contries - between 2008 and 2022.

Thailand: Previously the world’s leading gypsum exporter, Thailand began to cap its exports with the goal to conserve resources for domestic use in around 2017. This has been done by the government regulating the minimum free on board (FOB) export selling price. The current FOB price is above US$20/t.

Iran: Gypsum export volumes from Iran started to drop significantly after the tightening of US-led sanctions. Historically, Iran exported around 10% of its annual production of gypsum, mainly to India and Gulf Cooperation Council (GCC) countries. In the event that sanctions are lifted, the Iranian construction and infrastructure sector should grow rapidly, creating immense demand for gypsum in the local construction industries. Gypsum export volumes would be limited, with the FOB prices possibly rising to pre-sanction levels of ~US$14-15/t.

Oman: Exports of gypsum from Oman climbed by 13.3% to hit a new peak of 9.9Mt in 2022. This compares to 8.74Mt in 2021 and consolidated the country’s position as the world’s biggest supplier of gypsum. This compares with exports of 8.74Mt in 2021. Oman supplies nearly 50% of imported gypsum in Asia, south east Africa and the GCC.

Oman exports nearly 50% of its total volume to India, with the other 50% exported to Bangladesh, Indonesia, Malaysia, Vietnam, Philippines, Japan, South Korea, UAE, countries in south east Africa and further afield.

However, while Oman is the pre-eminent exporter of gypsum in the region, its exportable gypsum reserves are very limited. Its government introduced a FOB floor price of US$12.50/t for raw gypsum exported out of the country in January 2017.

India lacks gypsum

The world’s second largest cement producer, India, has a scarcity of domestic gypsum supplies. Indeed, between the 2009 and 2023 financial years, Indian gypsum imports recorded a CAGR of 16.6%. During this period, the country imported a total of 57.1Mt, nearly 35% of the total gypsum consumed by its cement industry, which is much larger than its wallboard sector. Of this, Oman supplied 28Mt, 49% of the total imported gypsum. In the 2023 financial year, India imported 5.76Mt of gypsum, representing 35% of its total gypsum consumption. During this period, Oman supplied 5.2Mt, 90.3% of the total imports.

In the period to the end of the 2038 financial year, India’s cement and gypsum wallboard industries are expected to demand a total of 380Mt (CAGR of 5.15% compared to 2023 financial year). However, local supplies are estimated to be just 200Mt over the same period. This low availability of domestic gypsum will lead to supply constraints and increased dependence on imports, cumulatively requiring more than 180Mt of imports (CAGR of 8.9%) to meet domestic demand.

India’s local natural gypsum supplies are limited and inadequate for the growing cement industry. Further, phosphogypsum production is limited, and the majority of the existing phosphogypsum stockpiles are expected to be used in upcoming massive road construction projects, as reported by the Ministry of Road Transport and Highways.

Growth in the generation of flue gas desulphurisation (FGD) gypsum is uncertain, but will continue due to investments of over US$13bn in scrubbers at coal-fired power plants. India had initially set a 2017 deadline for thermal power plants to install FGD units to cut sulphur dioxide emissions. This was later changed to varying deadlines for different regions, ending in 2022, although subsequent extensions to 2025 have since been granted. Even after multiple extensions only 5% of coal-fired power plants had installed FGD systems as of 2022 and nearly 48% of the coal-based power generation capacity had not taken significant action to reduce pollution at source. This includes not awarding bids for FGD installations. Most of the remaining 47% are unlikely to manage retrofit FGD installations within the latest stipulated time limits, indicating that FGD gypsum supplies are some way off for India as a whole.

All of this does not bode well for India’s nascent wallboard sector or growing cement industry. Gypsum is an essential, non-substitutable critical raw material. The supply deficit in the domestic market has led to increased dependence on largely imports of natural gypsum, predominantly from Oman. This dependency is growing day by day.

Conclusion

Taking into consideration of all the above scenarios, Oman is emerging as the single most important supply source for gypsum to the above regions. This dominant position should give it significant leverage to control the imported gypsum market. However, Oman’s present exportable gypsum reserves are very limited.

The race is on to secure new sources of natural gypsum, especially in regions of the world that have growing demand for gypsum, such as India, Japan, Indonesia and Vietnam. In particular, Indian cement and gypsum wallboard manufacturers are likely to face serious challenges regarding availability and cost in the near future. Demand will be large enough to accommodate new additional import supplies from more distant countries like Spain and Mexico, but it will lead to very high CIF cost to the importers in the Indian Ocean region.