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Blog June 2020

Global aggregates market is on the rise

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Jan Tønder Intelligent Optimization Solution Advisor

Secondary and recycled aggregates are potentially interesting sources for the building material industry

Two of the major opportunities for the aggregates industry are the rapid industrialisation and urbanisation in developing economies and the increasing mega construction projects across the globe. The rise of investments in infrastructure is driving the pressure on the global construction and building materials industry, including deliveries of aggregates, thereby causing an increase in the sourcing of recycled and secondary aggregates in some regions. As primary aggregates are increasingly in higher demand, the future could depend on secondary and recycled sourcing.

Aggregates are the most mined materials in the world. Primary aggregates are drawn from 1,300 extraction sites on land or from offshore dredging. More and more recycled and secondary aggregates are also used in the building materials industry. Secondary aggregates are usually by-products of other industrial processes, for instance, pulverised fuel ash and metallurgical slags. Recycled aggregates are produced from construction and demolition waste, which is one of the most voluminous types of waste generated worldwide. They are produced in a central plant or at the source site, which saves on transport costs and has the environmental benefits of reducing lorry movements.

Another trend currently forming in the industry contributes to this, the use of roll-off containers in more ways than one. This means using roll-off containers first to transport aggregates to the building sites, and afterwards using them to transport the construction and demolition waste away from building sites, thereby making a type of hybrid business. It’s a win-win situation, maximising the use of otherwise empty containers to avoid empty ‘runs’ on the road and with that to lower the environmental impact.

Trends and potentials for the aggregates industry

The global construction and aggregates market continues to grow due to, amongst other factors, governments’ initiatives to stimulate economic developments by investing in the transportation sector and road construction activities. According to a report from 2018, construction aggregates registered a volume sale of 47 Bn tons that year, which correspond to a value of US$ 300 Bn. The authors of the report (‘Global market study on construction aggregates: infrastructure development investments creating opportunities’) predict a favourable development of the construction aggregates market with a steady compound annual growth rate of 6% from 2019 to 2029.

China remains a key consumer of the construction aggregates as the government executes the 13th five-year plan highly investing in the development of road and rail infrastructures. The infrastructural growth is also happening in India, which is likely to remain the fastest-growing construction aggregates market in the world. At the same time, the growth of the construction aggregates market in the developing countries will remain incremental with high population density upholding the demand for residents.

The global rise of the use of recycled and secondary aggregates

Since aggregates are the most used bulk material on the planet the question is where and how to get the raw materials in the most sustainable way. Mining for virgin aggregates strips away natural habitat, and with that natural flora and fauna. Since secondary aggregates are mostly produced in close proximity to building sites, companies can reduce vehicle movements and with that fuel costs. At the same time, they eliminate CO2 emissions and lower their environmental impact. Because of these significant benefits, ‘recycling’ is likely to remain an upcoming trend in countries like Canada and the United States, according to the aforementioned report. For instance, in the US recycled aggregates account for about 8% of the total demand for construction aggregates.

Europe also has sustainable aggregates in mind. The European Aggregates Industry (UEPG) launched its 2020 vision for a sustainable aggregates industry this year. The UEPG will continue to increase efforts towards an environmentally friendly and resource-efficient extraction and production, excellent health & safety record, as well as a good neighbourhood policy. This goes hand in hand with streamlined and smart regulation that will foster renewed economic and construction growth in Europe. Individual countries on the continent also do their part. For instance, in the United Kingdom, the Waste and Resources Action Programme (WRAP) promoted the use of aggregates made of recycled and secondary materials. As a result, 25% of the demand for aggregates was met through sustainable sourcing. Due to these efforts three years later this percentage was up to 30%.

Business opportunities for sustainable aggregates

The use of recycled and secondary aggregates is also on the rise in other countries, such as Tanzania. An ongoing research project is investigating the possibility to recycle concrete rubble to generate load-bearing concrete blocks for building construction. Recycling of concrete rubble can be an alternative source of aggregates something Tanzania was not familiar with. About 20% of rubble is reused for backfilling of a pothole, foundation and the rest is thrown away. The experience from developed countries shows that concrete rubble has great recycling potential like producing aggregates for stabilisation of sub-base in road construction.

As companies are starting to source recycled and secondary aggregates that are considered ‘waste’ to some businesses, it is important for aggregates businesses to look at the business possibilities of this development to achieve sustainability and build a circular economy within the construction supply chain.

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