Displaying items by tag: data
AFCP to stop sharing recent data on cement market
24 June 2022Argentina: The National Commission for Competition Defence (CNDC) has recommended that the Asociación de Fabricantes de Cemento Portland (AFCP) stop sharing information on cement production and deliveries on a provincial basis that is less than 12 months old. Following an investigation into the cement sector the competition body expressed concern about the “exchange of information" between the main local cement producers, according to the Ámbito Financiero newspaper. An official investigation into collusion between the companies that ran from 2016 to 2021 found that they carried out anti-competitive behaviour that led to costs for construction being inflated by US$180m. It concluded that the sector had a, “high degree of concentration, high barriers to entry and reduced competitive dynamics.” The cement industry was previously fined in 2005 when it was found to have acted as a cartel for 20 years from the 1980s.
Belgium: Cembureau, the European Cement Association has welcomed the adoption of the European Parliament reports on the European Union (EU) Emission Trading Scheme (ETS) and the EU Carbon Border Adjustment Mechanism (CBAM).
Koen Coppenholle, the chief executive officer of Cembureau, said “Our sector needs a coherent and predictable regulatory framework to deliver on its carbon neutrality ambitions. The texts adopted today offer significant improvements on key issues – such as the reinforcement of CBAM, the inclusion of indirect emissions, the need for a strong export solution for CBAM sectors, the inclusion of waste incineration in the EU ETS and the support for key breakthrough technologies - which we welcome.” He added that the association regretted the compromise reached suggesting delaying the implementation of the CBAM by one year as cement imports into the EU were growing “exponentially”.
Eurostat data cited by Cembureau shows that EU cement imports have increased by 300% in the past five years from 2016 to 2021, with specific spikes when the EU carbon price was at its highest level. The association is lobbying for what it calls a ‘watertight’ CBAM and a ‘realistic’ with the phase-out of free allocation of carbon credits to cement producers.
Pakistani 10-month cement sales drop in 2022
11 May 2022Pakistan: Cement producers in Pakistan sold 44.3Mt of cement in the first 10 months of the 2022 Pakistani financial year, which runs from 1 July 2021 to 30 June 2022, down by 8.2% year-on-year from 48.3Mt in the corresponding period of 2021.Members of the All Pakistan Cement Producers Association (APCMA) record domestic deliveries of 39.5Mt, down by 1.8% from 40.2Mt, and exports of 4.8Mt, down by 40% from 8.02Mt.
The association said that political and economic uncertainty in March 2022 had stalled construction sector investments. It called on the government to help to increase sales and reduce the cost of cement production.
Tajik cement production slows in first quarter
06 May 2022Tajikistan: Data from the Agency for Statistics under the President of Tajikistan shows that cement production fell by 5.9% year-on-year to 0.97Mt in the first quarter of 2022 from 1.03Mt in the same period in 2021. The country produced over 4.2Mt of cement in 2021, according to Asia-Plus. However, in April 2022 the government set an export target of 2Mt/yr by 2024.
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.
Cement shortages in the southern US
27 April 2022Cement shortages were being reported in the US media last week in Alabama and South Carolina. The owner of a ready-mixed concrete supplier in South Carolina was blaming it on labour and supply shortages. Dan Crosby, the president of Metrocon, told Fox News that his business could only take on 60% of the work it could normally cope with due to the issue despite demand for construction growing in the state. Meanwhile, the Alabama Concrete Industries Association said that its home state saw a 14% increase in the demand for concrete in 2021 but that a cement shortage might cause delays to projects. The association also pointed the blame at labour and supply issues. It pointed out that high demand for concrete during the winter prevented inventory being built up and then the annual cement plant maintenance breaks in the spring added to the problems. Once contractors actually secured supplies of cement they then faced further delays due to a nationwide truck driver shortage!
Graph 1: Annual rolling cement shipments in the South of the US. Source: USGS.
Data from the United States Geological Survey (USGS) doesn’t especially shed light on the situation in Alabama and South Carolina. Alabama was the fifth largest cement producing state in the country in January 2022 but this is unsurprising as it’s the state with the fifth largest cement production capacity. Rolling annual data on Portland and blended cement shipments by origin show the effects of the coronavirus outbreak in the south from the start of 2020 to January 2022. Shipments took a dive in 2020 and then mostly recovered in 2021. However, Alabama, Kentucky and Tennessee saw shipments rise from 7.1Mt pre-pandemic to 7.6Mt in January 2022. South Carolina’s shipments grew from 3Mt to 3.2Mt. Regionally, the North East had a similar pattern although, unlike the South, shipments have surpassed those at the start of 2020. The Midwest and West were different with a general upwards trend over the two years, although the West softened slightly from mid-2021 onwards. Overall the US as a whole has seen its shipments grow throughout this period.
Ed Sullivan from the Portland Cement Association (PCA) told the May 2022 issue of Global Cement Magazine that the US cement sector did well in 2021 with a 4.1% year-on-year rise in sales to 104Mt. However, he flagged up supply chain problems that actually slowed growth, led by a lack of staff.
The other point along these lines that Sullivan made was that imports of cement might not necessarily be able to compensate for domestic supply issues due to global demand for shipping post-coronavirus. USGS data placed imports to the US at 13.7Mt in 2019 compared to 16.3Mt in 2021. Notably, Cemex restarted one production line in 2021 at its CPN cement plant in Sonora State in Mexico to export cement to the west of the US. In March 2022 it added that it was going to restart another line at the plant also. It’s not alone though as GCC reported in January 2022 that a line at one of its plants in Chihuahua, Mexico, was exporting cement to Texas. Sullivan reckoned that January 2022 was ‘weak’ but that it was followed by an ‘extremely strong’ February 2022. The first quarter results from Holcim and CRH seem to back this up with the former describing the period as ‘outstanding’ and the region leading its sales and earnings growth rate globally. CRH reported strong demand in central and southern regions.
As the US economy restarted following the peak of the early coronavirus waves in 2020, various supply chain issues have manifested. Staff shortages are one issue and this can also worsen other logistic problems. The south seems particularly vulnerable to all of this as it is both the country’s largest cement market and because demand has held up. In January 2022 research by the International Monetary Fund (IMF) identified several reasons for staff shortages in the US and the UK. These included increased inactivity among older workers, the so called ‘She-cession’ (where female employment has overly reduced due to coronavirus trends) and shifting worker preferences amid strong labour demand.
Staff shortages are expected to sort themselves out throughout 2022 but favourable forecast demand for cement in the US is balanced by inflationary pressure. Persistent low staffing levels could further add to inflation growth. The US cement sector may be doing well at the moment but even success carries risks.
Global Cement’s Robert McCaffrey will be giving a keynote presentation at the IEEE-PCA Cement Conference in Las Vegas on Tuesday 3 May 2022. The May 2022 issue of Global Cement Magazine, including interviews with PCA chief executive officer Mike Ireland and chief economist Ed Sullivan, is available to download now.
Argentina: Data from the Asociación de Fabricantes de Cemento Portland (AFCP) shows that cement shipments grew by 7% year-on-year to 2.89Mt in the first quarter of 2022 from 2.71Mt in the same period in 2021. Local consumption of cement increased at a similar rate but exports rose by 18% to 31,040t from 26,276t.
Brazil: The Brazilian cement market closed the first quarter of 2022 with a decline in sales year-on-year, according to data from the Brazilian National Cement Industry Association (SNIC). This was in part due to strong rains that affected parts of the country in January and February 2022. In March 2022, however, there was some recovery, with a 0.3% year-on-year increase in sales, to 5.53Mt.
Between January and March 2022, 14.8Mt of cement were shipped within Brazil, compared to 15.2Mt in the same period in 2021, a fall of 2.6%. Total sales, which include exports, totalled 14.91Mt, a 2.2% contraction compared to 15.25Mt in the same quarter of 2021.
SNIC said that the sector’s March 2022 performance had been bolstered by real estate projects, although this was not expected to continue. According to SNIC head Paulo Camillo Penna, self-construction, an important inducer of cement consumption, continues to slow down due to high unemployment
Moroccan domestic cement sales total 14Mt in 2021
31 March 2022Morocco: The Professional Association of Cement Manufacturers (APC) has recorded domestic cement deliveries of 14Mt in 2021. The figure corresponds to 58% of the industry’s 25.8Mt/yr capacity.
Update on Pakistan, March 2022
16 March 2022Cement producers in the north of Pakistan have started to increase their use of coal from Afghanistan in response to the ongoing volatility in energy markets. Research from a report by Darson Securities found that companies were already using up to 70% Afghan coal in their fuel mix with a further 20% being considered. Most of the northern producers are reported to have secured the cheaper Afghan coal for about two months of inventory, although Maple Leaf Cement was said to have four to five months of inventory. Meanwhile in the south of the country, producers were reported to be facing a tougher situation as Afghan coal costs more for them due to higher logistics charges and export orders were being reduced due to the low cost of clinker internationally. So they are focusing on the domestic market instead.
Graph 1: Cement despatches in Pakistan, 2015 – 2021. Source: All Pakistan Cement Manufacturers Association.
Data from the All Pakistan Cement Manufacturers Association (APCMA) shows that cement despatches have been steadily growing since the mid-2010s with a blip in 2020 caused by the start of the Covid-19 pandemic. The upward trend has been driven by local sales. Exports have generally grown at the same time, with more variance, but they are yet to regain the high of nearly 11Mt reported in 2009. On a rolling annual basis, local sales have remained steady since mid-2021 but exports have been slowly falling. In April 2021 they were 9.17Mt but by February 2022 they were 7.33Mt. For the February 2022 figures APCMA blamed this on the growing cost of production, rising international freight rates, mounting coal prices and a trade ban with India. On that last point for example, Pakistan-based producers exported 1.21Mt of cement to India in the 2017 – 2018 financial year before exports stopped after February 2019. Despite a brief respite in the spring of 2021 talks are still ongoing to resume trade with India.
On the corporate side the country’s largest cement producer by capacity, Lucky Cement, drew the same conclusion as the APCMA with its half-year results to 31 December 2021. Its local sales volumes were down a little but its exports were down a lot. It noted that the reason its local sales were falling but national industry local sales were up slightly was due to some competitor plants being non-operational in the previous year. However, the company managed to keep sales revenue and earnings increasing year-on-year by successfully combating growing input costs with price rises. Bestway Cement, the country’s other large producer, reported a tougher situation in the second half of 2021, with both local sales and export volumes down. This was attributed to a boom in construction activity in the second half of 2020 as Covid-19 lockdowns were eased. Demand for cement since then was said to be ‘sluggish’ due to inflation and high commodity prices. It also pinned its marked fall in exports on political and economic instability in Afghanistan. However, turnover and operating profit were both up due to higher selling prices.
Elsewhere in the sector news since the start of 2021, Pakistan’s exports to South Africa remained stymied in early 2020 due to a review of ongoing tariffs and the government decision to restrict infrastructure projects to only using locally produced cement. On the sustainability front the APCMA started to set out its decarbonisation strategy in November 2021. It may have a long way to go given that a think tank reported earlier in the year that the cement sector was the largest emitter of coal-related CO2 emissions in the country, even more than power generation. Alongside this plenty of capacity additions have been announced. Lucky Cement started commercial cement production at its 1.2Mt/yr integrated Samawah cement plant in March 2021. Various new cement plants and upgrades to existing plants have been proposed by Bestway Cement, Cherat Cement, Fauji Cement, Kohat Cement Company, Lucky Cement and Maple Leaf Cement. Finally of note to a sector troubled by energy prices, in September 2021 the Pakistan International Bulk Terminal said it was going to upgrade its coal handling capacity to around 17Mt/yr by 2024.
Last week’s Global Cement Weekly covered Turkey. The contrasts are interesting because both of these countries have high cement exports and have raised energy concerns recently. This leads to the question of whether other cement exporters may be vulnerable to the current situation. Pakistan isn’t the only country where the cement industry is facing the negative effects of growing energy costs. This week in the sector news, Spain-based Tudela Veguín has shut down the kiln at its La Robla plant down for 10 days due to high electricity prices, Thailand-based Siam Cement Group (SCG) announced it was reviewing its investment plans and the UK-based Mineral Products Association lobbied the government on the issue.
The shift to Afghan coal by Pakistan’s cement producers is rational given the current situation. No doubt fuel buyers all over the world are doing similar things. In January 2022 the International Monetary Fund (IMF) forecast that Pakistan’s gross domestic product would grow by around 4% for 2021, 2022 and 2023 but current geopolitical events may test these estimates. Over the last year domestic cement demand has remained strong but inflation, growing input costs and the impetus to further rise prices may change this. Meanwhile, lots of new production capacity is in the pipeline and, if or when it is built, it may add additional competition pressure. This may present a problem in Pakistan if capacity utilisation levels drop but input costs keep on going up.