Displaying items by tag: Forecast

China: China Tianrui Group Cement has said that it expects that its 2015 net profit will drop by more than 30% year-on-year in 2015. It has blamed the downturn on China's economic slowdown that has reduced demand for cement and lowered the selling price. The cement producer didn’t release a figure for its expected net profit in 2015 but it reported a net profit of US$86.6m in 2014. It intends to release its full financial results for 2015 at the end of March 2016.

US: Domestic cement consumption will grow by as much as 5% in 2016, according to a report from the Portland Cement Association (PCA). Edward Sullivan, PCA chief economist noted that the ‘the fundamentals of our economy are sound’ at the 2016 World of Concrete event.

"With the recently passed federal highway bill and continued net increases in new jobs, we see clear indications that positive growth will continue," said Sullivan. The PCA's Market Intelligence Group will release an updated report on US cement consumption in March 2016.

The PCA has launched a year of celebrations to mark the organisation’s 100th anniversary.

China: Asia Cement expects a loss for 2015 due to lower product selling prices and foreign exchange losses from US Dollar-denominated loans. The producer reported a net profit of US$120m in 2014. Its financial results for 2015 will be released by the end of March 2015.

Germany: HeidelbergCement expects the falling oil prices to have a positive effect on its earnings in 2015, according to a company spokesperson. Low fuel prices are expected to have a positive impact on HeidelbergCement's energy costs. It generates as much as 80% of its revenue in oil-importing countries, which should further improve its results.

US: Despite a late start to the construction season and weaker than expected housing start numbers, a recently released report from the Portland Cement Association (PCA) shows that cement consumption in the USA will meet 2014 forecast expectations.

The PCA's cement forecast remains essentially unchanged since the September 2014 forecast. "The United States' cement market is expected to grow by 8.2% in 2014, followed by similar rates of growth in 2015 and 2016," said PCA Chief Economist and Group Vice President Edward Sullivan. "However, minor adjustments have been made regarding the construction sub-sectors. Housing starts, for example, have been trimmed slightly compared to forecasts released earlier in 2014."

While single-family housing starts are not reaching projected levels, the report indicates a new emphasis on multi-family starts. Demographic trends and strict mortgage standards are pushing more potential homebuyers into rental units.

Additionally, the oil price environment has changed significantly since summer 2014 and these new impacts have been integrated into the forecast projections for the paving sector. Going forward, Sullivan noted that the underlying economic fundamentals are strengthening and are reflected in the labour market. Sustained gains in monthly job creation, stronger state and local tax receipts, more favourable return on investments for commercial building and stronger household formation can lead to stronger construction spending in 2015.

Spain: The Spanish cement makers association Oficemen expects cement demand in Spain to fall by 3% year-on-year to 10.4Mt in 2014.

Despite the slight recovery of the Spanish economy expected by analysts, the year is expected to be difficult for the local cement makers, the chairman of Oficemen, Isidoro Miranda, has said. Cement demand is expected to start increasing in 2015 if the Development Ministry decides to boost investments public works, he added. In June 2014, cement demand in Spain fell by 2% year-on-year to 967,790t.

Indonesia: PT Indocement Tunggal Prakarsa Tbk has predicted that cement demand will increase in 2014. Indocement corporate secretary Sahat Panggabean pinned the prediction on increasing infrastructure and real estate projects in 2014.

In order to meet market demand Indocement is currently building a 4.4Mt/yr cement plant in Citeureup. The company is also in the process of seeking licenses for the two 2.5Mt/yr greenfield cement plants to be built in Central Java and a location outside of Java respectively.

In 2013 Indocement faced increased competition from new cement producers in the market and expanded cement production capacity established producers. Indocement also pointed out to Indonesian news agency Antara that some of the new producers were importing cement into the country from abroad.

Kenya/Tanzania: ARM Cement expects its revenue to grow year-on-year at a slightly faster rate in 2013 due new a new cement plant in Tanzania that increased its production capacity. Chief executive Pradeep Paunrana made the forecast in an interview with Reuters. The Kenyan cement producer expects similar growth in 2014.

A new cement grinding plant in Dar es Salaam, Tanzania that was commissioned in 2012 increased ARM's cement production capacity by 0.75Mt/yr to 1.75Mt/yr. Another 1.2Mt/yr clinker plant in Tanga, Tanzania is due to start production in early 2014.

In July 2013 ARM reported that its pre-tax profits for the first half of 2013 had rise by 28% year-on-year to US$11.5m.

UK: The Mineral Products Association (MPA) today, which promotes the interests of the cement industry in the UK, has today launched a landmark document for the UK cement industry, 'Cementing the Future – Sustaining an Essential British Industry'. The new publication sets out to explain the importance of cement and concrete to the UK economy and society and draws attention to the vulnerability of the industry to overseas competition unless the government acts to create a level playing field in terms of the cost of regulation and unilateral 'green taxes' that overseas competitors do not face.

"Cement is a key constituent in concrete, the most widely used man made substance on the planet , and underpins our economy and everyday life," said Dr Pal Chana, Executive Director of the MPA. "Our shops, factories, offices, homes, schools, hospitals and much more all depend on this critical material yet the industry is struggling to compete in the face of ever increasing costs, some of which are centrally imposed by government. Our strategic significance to the economy cannot be overstated."

"The government's own economic growth plans are predicated on a substantial increase in the construction of infrastructure and housing and cement and concrete are going to be needed for both," continued Chana. "We cannot allow the supply of this essential material to be left to the vagaries of the international trading markets, especially not when we have a deep rooted industry here in the UK with factories in mainly rural locations providing much needed jobs."

'Cementing the Future' calls on the government to: recognise the industry's strategic significance and potential to generate economic growth; acknowledge the industry's role in delivering a low-carbon future for the UK; deliver an economic climate of investment security and reduce regulatory uncertainty in the industry; reduce the cumulative cost burden on the industry and; lift unilateral green taxes. In return, the industry will deliver: a secure supply of quality-assured cement made in the UK; commitment to the UK government's infrastructure and built environment programme; continued investment in the future of a healthy domestic cement industry; sustained employment at our network of UK cement plants and the supporting supply chain and; a planned reduction of 81% in greenhouse gases as detailed in our Carbon Roadmap to 2050.

"The UK cement industry has provided an essential material for the built environment for over 100 years. Working with government, we can continue to make a vital contribution to development and cement the future of an essential British industry", concluded Chana.

US cement consumption may have disappointed some in the first quarter of 2013 but solid growth lies ahead, according to the Portland Cement Association (PCA). Just how solid that growth will be remains open to interpretation.

PCA chief economist Ed Sullivan forecast 8% growth in cement consumption at the start of 2013. Now's its been halved to just 4%. Yet he's standing by the hint of good news ahead, upping the growth from 2014 to 9.7%.

Figures from the major US cement producers present a mixed picture. The major multinational cement producers mostly suffered from the weather in early 2013. Lafarge saw its cement sales in North America drop by 23% year-on-year for the first half of 2013 to 4.4Mt from 5.7Mt in the same period of 2012. Cemex's cement sales in the US rose by 3% but no specific figures were released. Holcim's cement sales in North America fell by 7% to 5Mt from 5.4Mt. HeidelbergCement's cement sales in the North America grew by 5% to 5.7Mt from 5.4Mt.

Of the rest, Texas Industries reported a rise in cement shipments of 29% to 2.23Mt from 1.73Mt for the six months to the 31 May 2013. Titan saw sales in the US rise by 10% to US$258m.

Preliminary United States Geological Survey data for June 2013 suggests that the increase in portland and blended cement shipments in the US slowed in the first half of 2013. In 2011 32.1Mt were shipped, in 2012 37.0Mt were shipped and in 2013 37.2Mt were shipped.

Meanwhile the construction figures US Department of Commerce mostly suggested growth but not without the odd jitter. Construction spending fell slightly in June 2013. Total construction spending adjusted seasonally fell by 0.4% to US$869bn due to a fall in non-residential construction. Since then though the July 2013 figure hit US$901bn, the highest since June 2009.

Accordingly, in his forecast Sullivan pins his hopes on the residential sector in the near term. It has seen consistent growth since October 2012. However other industry commentators, like the American Institue of Architects, have focused on poor growth in non-residential construction.

Let's hope Sullivan's got it right.