Chart of the Week: European cement stocks swell as peace hopes rise

The European cement sector has had a strong start to 2025 compared to its US equivalent. As the chart shows, European cement stocks have been outperforming the broader euro area market since January 2023; but this year’s growth has been particularly strong, with the Datastream euro area cement index climbing around 45% since January to reach a new all-time high on 14 March — while its US counterpart has only registered 3% growth in the same period. As a result, the total market value of the US cement index relative to the euro area cement index has shrunk, falling from a high of 2.13 on 17 October 2024 to around 1.28 as of 14 March. Two sharp surges have taken place in the last two months, both tied to the ongoing peace negotiations regarding the Russia-Ukraine conflict. The first spike occurred on 12 February, the day of a phone call between the US and Russian presidents Donald Trump and Vladimir Putin; and the second jump, on 5 March, coincided with a halt in US intelligence-sharing with Ukraine, which has since been resumed. Thus, the outperformance of euro area cement stocks relative to their US counterparts seems related to the prospect of peace in Ukraine, with markets pricing in increased demand for cement amid a massive reconstruction effort once the conflict ends.

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The views expressed in this article are the views of the author, not necessarily those of LSEG.

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