Gypsum prices likely to rise in the next year

The steep decline in the residential and non-residential building sectors over the past five years has greatly affected gypsum demand, according to the National Association of Home Builders (NAHB). Consumption of gypsum fell more than 50 percent, from 41.6 million tons in 2006 to 19.4 million tons in 2010 (United States Geological Service).

Gypsum production depends heavily on construction industries. Approximately 90 percent of gypsum is used in the manufacture of wallboard for residential and non-residential building applications. A further 5 percent is used as an additive in cement production.

NAHB forecasts only a modest 1.3 percent increase in housing starts in 2011, then a 15 percent rise in 2012. Gypsum demand is expected to closely follow the housing starts forecast, remaining relatively flat in 2011 followed by a moderate increase in 2012.

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