Displaying items by tag: China
Allied Minerals opens second Chinese refractory production plant
02 January 2020China: Allied Minerals has commissioned a refractory production plant in Tianjin, 5km away from its existing plant in the city in Hebei province. Former Allied Minerals corporate vice president Tom Gibson explained: “We’ve built more than manufacturing plants and offices. We’ve built bridges.” The new plant will increase Allied Minerals’ supply of refractory products to cement producers in and around the city, which is located near the coast 100km from Beijing.
Sinotrans transports cement from Angola to DRC
30 December 2019Angola: Chinese-based Sinotrans has exported 800t of cement on the 1344km railway journey from Cimenfort’s 0.4Mt/yr Lobito grinding plant to the Democratic Republic of Congo (DRC). Angola Press Agency has reported that the cement was ground from clinker produced in China. Cimenfort sales coordinator Francisco Idelfrides suggested that the cement company may look to expand its production capacity in 2020. He said it sold 0.3Mt of cement in eastern Angola and the DRC in 2019.
Huaxin Cement invests US$0.9m to turn quarry green, wins award
24 December 2019China: Huaxin Cement’s Guoditang quarry in Dongchuan district, Kunming has won the Chinese government’s ‘Green Mine of the Year 2019’ award after receiving total investments of US$0.9m for vegetation recovery. Huaxin integrates land reclamation and afforestation into its step-mining method at the quarry, using planting quilts, sprinklers and drip irrigation devices to recover 80,000m2 of vegetation so far. The company has estimated that the mine will continue to supply its limestone needs in the area until late 2033.
The National Civil Affairs Commission named Huaxin Cement a ‘National Model Unit for National Unity and Progress’ on 17 December 2019. It is the only building materials producer to have obtained the title.
Anhui Conch courts flue gas desulphurisation gypsum suppliers
23 December 2019China: Anhui Conch has issued a request for tenders for a gypsum supply contract. The contract will cover the supply of synthetic gypsum produced by flue gas desulphurisation (FGD) to Anhui Conch between 1 February 2020 and 31 July 2020.
2019 in cement
18 December 2019It’s the end of the year so it’s time to look at trends in the sector news over the last 12 months. It’s also the end of a decade, so for a wider perspective check out the feature in the December 2019 issue of Global Cement Magazine. The map of shifting production capacity and the table of falling CO2 emissions per tonne are awesome and inspiring in their own way. They also point towards the successes and dangers facing the industry in the next decade.
Back on 2019 here are some of the main themes of the year in the industry news. This is a selective list but if we missed anything crucial let us know.
European multinationals retreat
LafargeHolcim left the Philippines, Malaysia and Indonesia, HeidelbergCement sold up in Ukraine and reduced its stake in Morocco and CRH is reportedly making plans to leave the Philippines and India, if local media speculation can be believed. To be fair to HeidelbergCement it has also instigated some key acquisitions here and there, but there definitely has been a feel of the multinationals cutting their losses in certain places and retreating that bit closer to their heartlands.
CRH’s chief executive officer Albert Manifold summed it up an earnings meeting when he said, “…you're faced with a capital allocation decision of investing in Europe or North America where you've got stability, certainty, overlap, capability, versus going for something a bit more exotic. The returns you need to generate to justify that higher level of risk are extraordinary and we just don't see it.”
The battle for the European Green Deal
One battle that’s happening right now is the lobbying behind the scenes for so-called energy-intensive industries in Europe as part of the forthcoming European Green Deal. The cement industry is very aware that it is walking a tightrope on this one. The European Union (EU) Emissions Trading Scheme (ETS) CO2 price started to bite in 2019, hitting a high of Euro28/t in August 2019 and plant closures have been blamed on it. The rhetoric from Ursula von der Leyen, the new president of the European Commission, has been bullish on climate legislation and the agitation of Greta Thunberg internationally and groups like Extinction Rebellion has kept the issue in the press. Cembureau, the European Cement Association, is keen to promote the industry’s sustainability credentials but it is concerned that aspects of the proposed deal will create ‘uncertainty and risks.’ Get it wrong and problems like the incoming ban on refuse-derived fuel (RDF) imports into the Netherlands may proliferate. What the Green Deal ends up as could influence the European cement industry for decades.
The managed march of China
Last’s week article on a price spike in Henan province illustrated the tension in China between markets and government intervention. It looks like this was driven by an increase in infrastructure spending with cement sales starting to rise. Cement production growth has also picked up in most provinces in the first three quarters of 2019. This follows a slow fall in cement sales over the last five years as state measures such as consolidation and peak shifting have been implemented. The government dominates the Chinese market and this extends west, as waste importers have previously found out to their cost.
Meanwhile, the Chinese industry has continued to grow internationally. Rather than buying existing assets it has tended to build its own plants, often in joint ventures with junior local partners. LafargeHolcim may have left Indonesia in 2018 but perhaps the real story was Anhui Conch's becoming the country's third biggest producer by local capacity. Coupled with the Chinese dominance in the supplier market this has meant that most new plant projects around the world are either being built by a Chinese company or supplied by one.
India consolidates but watches dust levels
Consolidation has been the continued theme in the world's second largest cement industry, with the auction for Emami Cement and UltraTech Cement’s acquisition of Century Textiles and Industries. Notably, UltraTech Cement has decided to focus its attention on only India despite the overseas assets it acquired previously. Growth in cement sales in the second half of 2019 has slowed and capacity utilisation rates remain low. Indian press reports that CRH is considering selling up. Together with the country's low per capita cement consumption this suggests a continued trend for consolidation for the time being.
Environmental regulations may also play a part in rationalising the local industry, as has already happened in China. The Indian government considered banning petcoke imports in 2018 in an attempt to decrease air pollution. Later, in mid-2019, a pilot emissions trading scheme (ETS) for particulate matter (PM) was launched in Surat, Gujarat. At the same time the state pollution boards have been getting tough with producers for breaching their limits.
Steady growth in the US
The US market has been a dependable one over the last year, generally propping up the balance sheets of the multinational producers. Cement shipments grew in the first eight months of the year with increases reported in the North-Eastern and Southern regions. Imports also mounted as the US-China trade war benefitted Turkey and Mexico at the expense of China. Alongside this a modest trade in cement plants has been going on with upgrades also underway. Ed Sullivan at the Portland Cement Association forecasts slowing growth in the early 2020s but he doesn’t think a recession is coming anytime soon.
Mixed picture in Latin America
There have been winners and losers south of the Rio Grande in 2019. Mexico was struggling with lower government infrastructure spending hitting cement sales volumes in the first half of the year although US threats to block exports haven’t come to pass so far. Far to the south Argentina’s economy has been holding the cement industry back leading to a 7% fall in cement sales in the first 11 months of the year. Both of these countries’ travails pale in comparison to Venezuela’s estimated capacity utilisation of just 12.5%. There have been bright spots in the region though with Brazil’s gradual return to growth in 2019. The November 2019 figures suggest sales growth of just under 4% for the year. Peru, meanwhile, continues to shine with continued production and sales growth.
North and south divide in Africa and the Middle East
The divide between the Middle East and North African (MENA) and Sub-Saharan regions has grown starker as more MENA countries have become cement exporters, particularly in North Africa. The economy in Turkey has held back the industry there and the sector has pivoted to exports, Egypt remains beset by overcapacity and Saudi Arabian producers have continued to renew their clinker export licences.
South of the Sahara key countries, including Nigeria, Kenya and South Africa, have suffered from poor sales due to a variety of reasons, including competition and the local economies. Other countries with smaller cement industries have continued to propose and build new plants as the race to reduce the price of cement in the interior drives change.
Changes in shipping regulations
One of the warning signs that flashed up at the CemProspects conference this year was the uncertainty surrounding the new International Maritime Organistaion (IMO) 2020 environmental regulations for shipping. A meeting of commodity traders for fuels for the cement industry would be expected to be wary of this kind of thing. Their job is to minimise the risk of fluctuating fuel prices for their employers after all. Yet, given that the global cement industry produces too much cement, this has implications for the clinker and cement traders too. This could potentially affect the price of fuels, input materials and clinker if shipping patterns change. Ultimately, IMO 2020 comes down to enforcement but already ship operators have to decide whether and when to act.
Do androids dream of working in cement plants?
There’s a been a steady drip of digitisation stories in the sector news this year, from LafargeHolcim’s Industry 4.0 plan to Cemex’s various initiatives and more. At present the question appears to be: how far can Industry 4.0 / internet of things style developments go in a heavy industrial setting like cement? Will it just manage discrete parts of the process such as logistics and mills or could it end up controlling larger parts of the process? Work by companies like Petuum show that autonomous plant operation is happening but it’s still very uncertain whether the machines will replace us all in the 2020s.
On that cheery note - enjoy the winter break if you have one.
Global Cement Weekly will return on 8 January 2020
China on track for fully paved roads by 31 December 2019
18 December 2019China: Cement or asphalt roads will connect every settlement in China by 31 December 2019, according to an announcement by the Ministry of Transport. Sichaun province is the last part of the country to receive fully paved roads, which were yet to reach one town and one village as of 15 December 2019. Xinhua’s China Economic Information Service has reported that China has invested US$87.5bn in the construction of 6.34 million km of auxiliary roads since it began construction of the system in 2003.
Maerz provides update on lime kiln projects
17 December 2019Switzerland: Maerz has reported the successful installation of two Maerz PFR lime kilns with a capacity of 200t/day and 300t/day at Daesung MDI in South Korea, which was commissioned on 19 October 2019. The company also installed a 150t/day E2 two-shaft lime kiln at Easternbulk Lime Products Private Ltd in July 2019. Three further new plants with Maerz kilns are scheduled to enter operation in 2020 in China, Mexico and Russia and a second kiln will increase production of petcoke at Caleras’ San Juan plant in Argentina beginning in mid-2020.
FabCom unveils new fibre cement board
16 December 2019Nigeria: Chinese-owned FabCom has unveiled a new fibre cement board at a ceremony celebrating the fifth anniversary of its presence in Nigeria. The Sun has reported that the company will manufacture 5Mm2/yr at its fibre cement board plant in Ambuja, which will be operational before 1 January 2021. FabCom managing director Liuxing Wang praised the product’s environmental friendliness, noting its durability, sound insulation, fire and water resistance and multi-use workability. FabCom’s investments in Nigeria total US$190m and have created 200,000 jobs, the company says.
Crazy cement prices in China
11 December 2019In case you’ve missed it there’s been a boom in cement demand in China during the current quarter. Henan province saw a run on cement prices in November 2019 that the local press described as ‘crazy.’ Some companies were issuing price adjustments twice a day, according to the China Cement Association. The article on the CCA’s website also includes a video showing dozens of cement trucks queuing at a mill with the caption ‘all the plants are like this, don’t ask the price any more.’
The CCA’s blamed the situation in Henan on pollution controls on production and a rebound in cement demand. Weather-based pollution controls enacted in late October 2019 shut-down or limited production at 66 of the province’s 72 clinker production lines. Builders were then forced to source cement from neighbouring Shanxi, Hebei and Shaanxi provinces. At the same time demand for cement from real estate and infrastructure sectors picked up in the fourth quarter of 2019. Following advice from the local cement manufacturers’ association, the provincial government relaxed the rules on peak shifting that normally run from November to February in a bid to control the situation. Cement prices in Henan hit a high in mid-to-late November 2019 and have since subsided somewhat.
Nationally, Chinese cement prices hit a high in late November 2019 beating the highest level in 2018 and also setting the highest price since 2011. The key regions driving the increase have been in central and south China, including Guangxi, Guangdong and Henan. One more thing to note here is that peak shifting or seasonal shutdown of production capacity has different dates in different provinces. So, potentially, the situation could repeat itself if unexpected demand continues and provincial governments fail to monitor the situation.
Recently a couple of economic indicators in China have suggested a recovery in infrastructure spending in recent months, supporting increased cement demand. Data from Wind quoted by the Financial Times newspaper suggests that the cement price rose by 15% since September 2019 in large cities. Reinforced steel (rebar) and aggregates prices have increased similarly. At the same time the South China Post newspaper has reported a growth in the Purchasing Managers’ Index (PMI), an indicator of manufacturing activity that could also point to renewed infrastructure spending. Central government is also reported to be taking measures to support provincial infrastructure development.
If true then this may be creating some pretty direct lessons in economic interventionism. The Chinese government appears to be stimulating demand for cement via infrastructure growth while restricting production at the same time. Cement prices have reacted in a ‘crazy’ fashion. The real tension here is between two conflicting desires: protecting the economy and protecting the environment. The state planners may be grappling with this one for a while.
KHD shares test success with NOx emission reducer
02 December 2019China: KHD has reported NOx emissions consistently below 50mg/Nm3 at Tianrui’s 2.0Mt/yr Weihui integrated cement plant in Henan province, where its Pyroredox gasifying reactor has been installed between the kiln inlet chamber and preheater calciner. The NOx reduction after several months of operation was 66%, while reagent usage fell by 78% compared to with the plant’s selective non-catalytic reducer without a Pyroredox fitted. No extra power or fuel was used and production was unaffected. The Pyroredox requires two to four weeks’ downtime for its installation and is now operational at multiple cement plants across China.