Displaying items by tag: Output
Santa Cruz sees record high for cement production
16 April 2024Bolivia: National cement production reached a record 4Mt in 2023, despite a noted decline in exports, according to the Bolivian Institute of Foreign Trade (IBCE). Santa Cruz contributed 27.4% to the total cement output, followed closely by La Paz with 26.8%, and Chuquisaca at 18.3%. According to Noticias Financieras News, this output is largely due to investments by cement companies in Santa Cruz, such as Itacamba's US$220m investment in a new plant in 2016, which has a production capacity of 870,000t/yr. Other firms like Soboce and Fancesa have also invested in the region. The construction industry in Santa Cruz grew by 3% in 2023, although this was a decrease in growth rate compared to previous years.
Cement production in Poland declines in 2023
04 April 2024Poland: The Polish Cement Association reported a 12% fall in cement production in 2023, with output reaching 16.6Mt, according to data from the Central Statistical Office. The decline reflects challenges faced by the construction sector amidst a slowing economy, despite a slight GDP growth of over 0.2%.
Zbigniew Pilch, chief marketing officer of the association, said "2023 was a difficult year for the construction sector as the economy slowed down while GDP grew by a little over 0.2%." The initial data for 2024 suggests a potential rebound in the Polish cement industry, however, with Pilch adding "In February 2024, cement production totalled 1.2Mt, which represents a 33% year-on-year increase.”
Update on China, April 2024
03 April 2024We turn to look at the Chinese cement sector now that the larger China-based cement producers have released their financial results for 2023. In summary, national output of cement has continued to fall and many of the bigger companies are reporting weakening sales and profits. Yet this trend appears to be slowing, with a few of the producers managing to grow revenue, profits and sales volumes.
Graph 1: Cement output in China, 2018 to 2023. Source: National Bureau of Statistics of China.
Data from the National Bureau of Statistics of China shows that cement output fell by 4.5% year-on-year from 2.11Bnt in 2022 to 2.02Bnt in 2023. This is a slower rate of decline than the 10.4% drop reported between 2021 and 2022. However, it is worth noting that the rate of decrease in output on a half-year basis fell strongly in the first half of 2023 but remained similar in the second half of the year. In its commentary, the China Cement Association (CCA) said that the country’s real estate development investment fell by 10% year-on-year to US$1.53tn.
Graph 2: Sales revenue from selected Chinese cement producers. Source: Company financial reports.
Graph 3: Sales volumes of cement and clinker from selected Chinese cement producers. Source: Company financial reports.
Unlike in 2022 the two graphs above show that not every cement producer has lost revenue or sales volumes of cement in 2023. CNBM chair Zhou Yuxian used the phrase ‘storms and challenges’ to describe the situation faced by the world’s largest cement company. He left president Wei Rushan to deliver the bad news that the cement industry as a whole faced “insufficient demand, weakening expectations and weakening off-peak season characteristics” along with surpluses and high costs. He said that the cement sector in China saw its profit fall by 50% to US$4.42bn in 2023, its lowest figure since the mid-2000s.
In comparison CNBM Group’s revenue fell by 10% year-on-year to US$29bn and profit by 52% to US$534m. This was principally due to losses from the group’s basic building materials division, the section that makes heavy building materials, including cement. Alongside this, it pushed on with its supply-side structural reforms, implemented staggered peak production and worked on sustainability initiatives. These included preparations for the national carbon emissions trading scheme. Anhui Conch’s results showed that it managed to increase its revenue but its sales volumes of cement dropped and its profits fell by 33% to US$1.48bn. It achieved the boost in revenue by growing its trading business.
Of the smaller companies covered here, only Huaxin Cement managed to grow its revenue in 2023. It appeared to pull this off by growing its concrete and aggregate business domestically whilst growing the business overseas at the same time. The share of its international business grew to 16% in 2023 from 13% in 2022. Major overseas acquisitions in 2023 included Oman Cement and InterCement’s subsidiaries in Mozambique and South Africa. More recently Huaxin Cement has also been reported by local media as the preferential bidder for InterCement’s business in Brazil, although no formal announcement has been made. Of the rest, Tangshan Jidong Cement, CRBMT and China Tianrui all reported declines in sales revenue and profits. Tangshan Jidong Cement did manage to grow its cement sales volumes, but reported heightened competition in the north and north-east of China where most of its plants are located.
With the first quarter results for 2024 on the way soon, the CCA has been bracing itself and the sector for more bad news. It noted that national cement prices during the last week of March 2024 were about 1% lower than during the same week in 2023. Prices were lower in East, Central and South China, although they had increased in Chengdu and Sichuan. The CCA is worried that a price war, either nationally or regionally, will make a bad situation worse. It has called on cement producers to accept that the slowdown of infrastructure development in the country has led to a decline in cement demand and that this is the new normal. Apart from the usual watchwords of ‘self-discipline,’ ‘overcapacity reduction’ and ‘supply-side reforms’ the association has suggested that cement companies look for growth internationally and look to the leadership of associations to help everyone adapt to the new market situation. China’s sales output of cement may be starting to stabilise, but the market has a way to go yet to adapt to the new reality.
Update on China, August 2022
31 August 2022The larger cement producers in China have published their half-year financial results and the numbers are looking grim. Starting with data from the National Bureau of Statistics of China, cement output in the country fell by 14.5% year-on-year to 979Mt in the first half of 2022 from 1.14Bnt in the same period in 2021. This is the lowest first half output figure since 2012. The decline on a monthly basis started in May 2021 and has carried on consistently since then. Rolling cumulative annual output hit a low of 2.18Bnt in July 2022, the lowest figure since at least the start of 2019 and well before the coronavirus pandemic started.
Graph 1: Cement output in China, 2018 to 2022. Source: National Bureau of Statistics of China.
The financial figures from the cement producers have mostly followed this trend. Of the companies covered here, Anhui Conch’s drop in sales revenue was the most distinct at 30% year-on-year to US$8.14bn. However, Jidong Cement actually managed to increase its revenue and Huaxin Cement’s decrease was fairly small, possibly due to its growing stable of overseas projects. None of these companies could avoid falling cement and clinkers sales volumes though. Again, Anhui Conch is the outlier here with a larger fall in sales volumes proportionally at nearly 40% compared to around 20% for the rest. Chen Bolin, the deputy secretary-general of China Cement Association (CCA), told the 21st Century Business Herald newspaper that of the 20 or so listed cement companies that have published their half-year reports by the end of August 2022, more than half had reported falling sales revenue and net profit and only one company had managed to increase its net profit.
Graph 2: Sales revenue from selected Chinese cement producers. Source: Company financial reports. Note: Cement revenue shown only for CNBM & Taiwan Cement.
Graph 3: Sales volumes of cement and clinker from selected Chinese cement producers. Source: Company financial reports.
The financial reports from the Chinese cement companies detailed here have been fairly light on the reasons for the current state of the sector. Repeated coronavirus outbreaks, instability in the real estate market, a lack of funding for infrastructure projects, growing energy and raw materials costs, pressure on prices and a generally weak economy have all been blamed for the situation. Media channels outside of China have continued to scan the country’s real estate sector for signs of collapse following Evergrande’s problems in 2021. However Chen Bolin diplomatically held back by describing the real estate market as not yet stabilised and a drag on cement demand. Instead he hoped that large-scale infrastructure projects would offer some form of relief.
One last point to note, that both the CCA has made and could be seen in some of the company reports, is that some of the Chinese cement companies are already starting to diversify their businesses. This is in parallel to what some of the larger western-based multinational cement producers have also been doing in recent years with forays into concrete, light building materials and construction chemicals. CNBM already has large concrete, light building materials and engineering subsidiaries. However, Huaxin Cement and Anhui Conch have also started to branch out recently into aggregates, concrete and new energy generation, in the case of the latter company. Things may get worse before they get better, especially depending when or if the Chinese government decides to act on the real estate market. However, whatever kind of adjustment the cement sector may face, there are some signs present already of what some of the companies may do next.
China: Cement output fell by 12% year-on-year to 387Mt in the first quarter of 2022. Data from the Ministry of Industry and Information Technology also shows that cement output volumes fell by 5.6% year-on-year to 187Mt in March 2022, according to the Xinhua News Agency. The China Cement Association has blamed this on the latest local coronavirus wave, limited construction project funds and poor weather.
Saudi cement output remains stable in 2021
24 January 2022Saudi Arabia: Cement output rose slightly to 53.7Mt in 2021 from 534Mt in 2021. Clinker output increased by 12% year-on-year to 55.1Mt from 49.2Mt. Cement exports fell by 32% to 1.44Mt from 2.13Mt but clinker exports grew by 50% to 6.73Mt from 4.50Mt. Saudi Cement remained the country’s largest clinker export but exports from Yanbu Cement and Arabian Cement grew sharply.
Russia: Eurocement Group has reported that it has produced more than 11.5Mt of cement in the first six months of 2013, a year-on-year rise of 5%, in its 16 cement plants in Russia, Ukraine and Uzbekistan. Cement shipments have increased by 7% in the period.
The Russian-based cement producer announced plans to upgrade all of its production facilities to make cement using a dry-process by 2018. Currently only 25% of its plants use the dry process. Eurocement also plans to increase its annual cement production capacity by 4Mt/yr.
According to Russian newspaper Kommersant, half of Russia's regions are not meeting housing construction targets due to a lack of building materials. The country needs more than 20 new cement factories, according the government, but companies are refusing to build new plants due to a lack of potential returns on investment. Eurocement responded to the claims by saying that it is cheaper to modernise existing plants.
China's cement output rises 9.7% in H1
17 July 2013China: China's cement output has increased by 9.7% year-on-year to 1.1Bt for the first half of 2013, according to the data released by the National Bureau of Statistics (NBS). In June 2013 cement output increased by 8.8% year-on-year to 228Mt.
China cement output grows 8.2% to 417Mt in Q1
15 April 2013China: Output of cement in China reached 417Mt in the first quarter of 2013, a rise of 8.2% year-on-year according to data issued by the National Bureau of Statistics of China. Cement output in March 2013 grew by 6.9% year-on-year to 187Mt.
In a separate formal announcement China's Ministry of Industry and Information Technology informed the provinces that 73.5Mt of obsolete cement production capacity will be eliminated in 2013.
Iskitimtsement output rises 23.1%
03 October 2012Russia: RATM Holding's Iskitimcement Cement Plant has reported a rise in its output by 23.1% year-on-year to 1.12Mt for January to September 2012. Deliveries rose by 28.9% to 1.29Mt in the same period.
In July to September 2012 Iskitimtsement produced 535,000t of cement and sold 579,369t. In September 2012 the company's output reached 168,000t and sales were 187,434t. Iskitimtsement has said that it plans to boost 2012 production by 9.4% year-on-year to 1.4Mt/yr.
Nationally, cement production in Russia to expected to reach 61Mt in 2012 as the construction industry continues to drive growth. During the first half of 2012, construction output managed to maintain a growth pace above that of the gross domestic product (GDP), recording a 5.4% expansion in year-on-year terms while GDP managed to expand by only 4.5% for the same period. At the same time, the production of cement in Russia totalled nearly 27.8Mt in the first half of 2012, representing a 14.1% annual increase. The sector is expected to further intensify in the near future due to large investments by public authorities in construction projects.