
Displaying items by tag: Export
Will the US trade war on China affect cement?
18 July 2018The US government proposed placing tariffs on cement this week as part of its slowly-escalating trade war against China. The latest list will face a 10% tariff from the end of August 2018 following a consultation period. Of relevance to the cement industry, it will include limestone flux, quicklime, slaked lime, gypsum, anhydrite, clinkers of Portland, aluminous, slag, supersulfate and similar hydraulic cements, white Portland cement, Portland cement, aluminous cement, slag cement, refractory cements, additives for cement, cement based building materials and more.
Graph 1: Imports of hydraulic cement and clinker to the US from China, 2012 – 2017. Source: United States Geologic Survey (USGS).
Graph 2: Major exporters of hydraulic cement and clinker (Mt) to the US in 2017. Source: United States Geologic Survey (USGS).
At face value it seems unlikely that the tariffs will do much direct damage to the cement sectors in either China or the US. United States Geological Survey (USGS) data reports that the US imported 2Mt of cement and clinker from China in 2017 out of a total of 13.6Mt of imports. China was the third-largest exporter of cement to the US after Canada and Greece. Given the mammoth size of the Chinese cement industry - it sold 2.3Bnt in 2017 according to National Bureau of Statistics of China - it is unlikely that losing this export stream will cause the sector to lose much sleep. If the exports are coming from smaller producers though it might well impact upon them disproportionally. Any potential shortfall in the US is likely to be met by any number of the world’s overproducing cement nations. Vietnam, Iran (!) and Indonesia are the first few candidates that spring to mind.
The other point to consider from the USGS data is that the value of the cement imported from China in 2017 was on the cheaper side. Altogether the value of Chinese imported cement came to US$132m in 2017. Yet it was the fifth cheapest for cost, insurance and freight per tonne out of 32 importing countries. Add a 10% tariff to that and it is still only the eighth cheapest. If these figures represent reality then it seems unlikely that tariffs will cause the Chinese imports to slow down much.
All of this pretty much fits the general impression of China as a country that produces the most cement in the world but it actually exports very little of it. Consultancies like Ad and Marcia Ligthart’s Cement Distribution Consultants have made a point of downplaying China’s export market in recent years due to a lack of deep water terminals for plants and a general inward focus. Yet the sheer amount of production capacity could have big implications if it ever does get properly connected to the sea.
Other products facing the new tariffs that have relevance for the cement industry include input materials like gypsum or secondary cementitious materials (SCM) like slag and fly ash. Gypsum isn’t likely to be a concern given the presence of established exporters in Canada, Spain, Thailand, Oman and the like. SCMs are more mercurial but don’t appear to be too intrinsic to the US market. Ferrous slag imports grew to 2Mt in 2015 according to USGS data but the main sources were Japan, Canada, Spain and Germany. Charles Zeynel of ZAG International at the Global Slag Conference 2018 posited that Chinese exports comprised up to 6Mt or 25% of the world market of traded international slag.
All of this suggests a symbolic nature to the US tariffs on Chinese cement and related products. Perhaps the real news story to have noted this week was the framework agreement signed between Denmark’s FLSmidth and China’s China National Building Material (CNBM), the world’s largest cement producer and one of its larger cement equipment manufacturers.
Typically many of the new cement plant projects Global Cement has reported upon recently involve a Chinese contractor that may or may not be using European engineering from companies like FLSmidth who previously would have been managing the build themselves. The point here is that new plants, production lines and upgrades at US cement plants might well be built by a Chinese company through its European partners. The new upgrade to Lehigh Hanson’s Mitchell plant in Indiana has been budgeted at US$600m. This is far more than the value of Chinese cement imported into the US in 2017.
Vietnam: The Vietnam Cement Industry Corporation (Vicem) exported the majority of its cement sales in the first half of 2018. The government-owned cement producer’s sales rose by 10.1% to 14.2Mt, according to the Viet Nam News newspaper. However, 11.7Mt of this figure was exported. The company’s cement and clinker production rose by 8.5% to 10.2Mt and 6.4% to 11.6Mt respectively.
Peru: Cement production in Peru rose by 1.7% year-on-year to 4.8Mt in the first half of 2018 from 4.7Mt in the same period in 2016. Local despatches grew by 2% to 4.6Mt from 4.5Mt, according to data from Asociación de Productores de Cemento (Asocem). Clinker exports increased nearly six times to 0.6Mt from 0.1Mt.
Czech cement production grew by 2.5% to 4Mt in 2017
18 July 2018Czech Republic: The Czech Cement Association reports that production grew by 2.5% year-on-year to 4Mt in 2017. Cement consumption grew by 3.5% to 3.95Mt in the same period, according to the Czech News Agency. Exports fell by 6.5% to 0.55Mt. The majority of this output went to Slovakia, a minority to Germany and the remainder to Poland and Austria. Imports increased by 19.2% to 0.55Mt, mostly coming from Slovakia and Poland.
Association members include Ceskomoravsky Cement, Cement Hranice na Morave, Cemex and Lafarge Cement. Each of these companies operates integrated plants locally.
Tajikistan: Tajikistan’s cement production rose by 39% year-on-year to 1.8Mt in the first half of 2018 from 1.3Mt in the same period in 2017. Of this total 0.7Mt was exported to neighbouring countries, principally Afghanistan and Uzbekistan, according to the Avesta news agency. The local cement industry is benefiting from government-backed infrastructure projects, a rise in domestic house building and a buoyant export market.
The country produced 3.1Mt of cement in 2017 and over 1Mt of this was exported. It has 13 cement producers with an estimated production capacity of 4Mt/yr. Local demand for cement is estimated to be 3 – 3.5Mt/yr.
US government proposes tariffs on Chinese cement
11 July 2018US/China: The Office of the US Trade Representative has proposed placing a 10% tariff on mineral and other products from China including cement. The list includes over 600 items and it will come into force following a period for public comment in August 2018.
Mineral products affected by the proposed tariffs of interest to the cement industry include limestone flux, quicklime, slaked lime, gypsum, anhydrite, clinkers of Portland, aluminous, slag, supersulfate and similar hydraulic cements, white Portland cement, Portland cement, aluminous cement, slag cement, refractory cements, additives for cement, cement based building materials and more.
The inclusion of additional products to a tariff list follows an earlier decision by the US government to tax imports from China worth US$34bn that came into force in early July 2018.
Birla White to launch four new products by 2020
09 July 2018India: Birla White, a subsidiary of UltraTech Cement, plans to launch four new products by 2020. Research and development for the new products is underway at present, according to the Hindu newspaper. The white cement producer is also planning to increase its exports to 10% of its total volume by 2023. At present it exports 3% of its total volume. The company operates one cement plant at Rajashree Nagar in Rajasthan.
Nigeria: Aramando Martinez, the director of Dangote Cement’s Ibese plant, says that the unit exports 15 – 20% of its total production to markets in Benin, Togo and Ghana. The plant has a production capacity of 12Mt/yr, according to the Business Daily newspaper. Martinez added that the plant has also concluded plans to export 2Mt of clinker to grinding plants in Ghana and Cameroon in the second half of 2018.
Sudanese government to support cement exports
02 July 2018Sudan: Musa Mohamed Karama, the Minister of Industry, says that government is keen to remove all obstacles facing the cement industry including a block on exports. The announcement follows a meeting with Mohamed Abdullah, the UAE-based chairman of Berber Cement Company, according to the Sudan News Agency. The country’s cement production capacity exceeds its domestic consumption.
Cemex Colombia to grow additives production in 2018
29 June 2018Colombia: Cemex Colombia plans to grow its additives production to 9.7ML in 2018. The building materials producer says it is the only local manufacturer of producing aggregate, cement and additives, according to the La Republica newspaper. It produces additives to enhance the properties of cement and concrete. It also supplies additives to other companies with around 11% aimed at third parties in Latin America.