Displaying items by tag: Forecast

US: Ed Sullivan, the Portland Cement Association’s (PCA) Senior Vice President and Chief Economist, forecasts that cement consumption will grow ‘moderately’ in 2019 alongside similar performance in the general US economy. However, he flagged gradual increases in interest rates, the aging recovery and accompanied trade issues as possible factors slowing down the cement market. Sullivan made his comments at the World of Concrete event in Las Vegas, where he revealed details from his forthcoming spring forecast.

“The US economy’s long run of growth should continue in 2019,” said Sullivan. “Since 2011 we have averaged 2 million jobs being created each year and the unemployment rate is below 4%. Despite the headlines, the impact in the near term of the rising interest rates and inflation are relatively benign. Simply put, fundamentals like these take a long time to unwind.”

China: China National Building Material (CNBM) says that its profit will rise ‘substantially’ in 2018. It has attributed this to rising cement prices.

China: China Resources Cement (CRC) says that its profit will rise ‘significantly’ in 2018. It has attributed this to a 29% rise year-on-year in the average price of cement in the first 11 months of 2018.

Brazil: Paulo Camillo, the president of SNIC, forecasts that cement sales will rise by 3% in 2019. If he is correct then it will be the first rise in four years for the local industry. Total cement sales fell by 1.1% year-on-year to 52.8Mt in 2018 from 53.4Mt in 2017. Particular falls in sales were noted in the north and northeast of the country, although exports rose by 14.3% to 88,000t. A truck drivers strike and general economic uncertainty reduced the effects of a positive first half to the year. The cement association also said that freight, fuels and electricity costs grew ‘significantly’ in 2018. However, it is optimistic that new legislation support co-processing of alternative fuels will partly help to alleviate this situation.

China: West China Cement says that it is expecting its net profit to record a ‘substantial’ increase year-on-year in 2018. It has attributed this to a rise in average cement prices. Subsequently, its sales revenue rose by 28% year-on-year for the first eleven months of 2018 compared to the same period in 2017.

Making predictions is a mug’s game. Mug, if you don’t know already, is British slang for a fool. Although you can also drink tea or coffee out of a mug. Newspapers and magazines love predictions at this time of year and Global Cement is no exception. But before we give you our predictions, let’s see how a real expert got on 36 years ago. The science fiction author Isaac Asimov, of Three Laws of Robotics fame, had a go in 1983 when he was asked by the Toronto Star newspaper to try and guess the state of the world in 2019. You can read his original article here.

First up for a construction audience is where the great writer of fiction set in space gets it wrong: space. Asimov thought we’d be on the moon ‘in force’ by 2019, building a mining station to process minerals to make materials such as a concrete, metals, ceramics and glass. Other projects would include satellite solar farms in low earth orbit, observatories, factories and serious planning towards an off-earth settlement. ‘Mooncrete’ or ‘lunarcrete’ is definitely a theoretical thing that has received academic thought since the mid-1980s. We’re guessing that CO₂ emissions for cement and concrete would be less of a problem on the moon! Observatories and probes like the Hubble Space Telescope satellite have enriched astronomy. Factories and extra-terrestrial settlements appear another 36 years away.

As for the rest of the predictions, Asimov starts off with an immediate misstep for us smug citizens of 2019 with a riff on a potential nuclear confrontation between the US and the Soviet Union invalidating everything else he was about to say. Past this opening fumble though he’s not bad. He immediately identifies computers as the source of coming change on the scale of the industrial revolution as they enable some human jobs to be replaced and change the nature of others. Next up he identifies pollution and overpopulation as concerns for society before heading on to the importance of trans-national organisations to tackle these issues. He’s generally on trend although there are plenty of holes. For example, he doesn’t foresee networking effects such as a social media and the political implications of enhanced connectivity.

So, having seen how well a noted science fiction author got on, our first forecast is not to trust our predictions. However, if you really want to hear our thoughts, read on.

Chinese cement companies continue to build plants overseas
The background to this is that Song Zhiping, the former chairman of China National Building Material (CNBM) said in late 2017 that the company was planning to build 100 new plants in 50 countries by 2021. Lots of Chinese companies are backing projects in Central Asia and Africa. Many of these are joint ventures. The question arises as to what will happen if local investors default on their loan repayments…

Indian market heats up
Many of the major cement producers are betting on India in 2019 to hold their finances together. The Cement Manufacturers Association of India has forecast growth of 10% in the 2019 financial year to the end of March 2019, the fastest growth in the sector since it slowed down in 2011. A pledge by Prime Minister Narendra Modi to cut the Goods and Services Tax (GST) on cement to 18% from 28% can only help the market.

A tale of two Africas
By the demographics, investing in Africa should be a no-brainer for cement companies as countries develop. However, northern Africa is rapidly turning into an export market as capacity outstrips local demand. Sub-Saharan Africa is decidedly mixed as the coastal regions potentially get swamped by foreign clinker imports and capacity investments further inland can be risky. The current political instability in the Democratic Republic of Congo is one example of this. Another, the collapse of Kenya’s ARM Cement in mid-2018 offers a warning to investors of what can happen when things go wrong. Producers like Ngieria’s Dangote Cement are waiting in the wings to snap up a bargain. Expect more of the same in 2019.

Acquisitions to continue in Brazil
After years of poor performance the acquisitions and divestments in the cement industry finally started in Brazil in 2018. A new ‘pro-business’ president and a growing economy suggests that this trend should continue in 2019.

European cement producers test how fast legislators are prepared to meet climate commitments
European cement associations were warning in 2018 that the local industry faces issues balancing competiveness versus tightening climate legislation. In October 2018 three plants – two in Spain and one in Sweden – were targeted for closure proving that the associations were not kidding. More difficult choices are likely to follow in 2019.

If any readers have their own industry forecasts for 2019 let us know by emailing This email address is being protected from spambots. You need JavaScript enabled to view it.. If we get enough we’ll run a recap at the end of the year to let everyone know how they got on.

Happy New Year from Global Cement!

Philippines: The Philippine Cement Importers Association (PCIA) has warned of a slowdown in the construction sector due to an investigation in tariffs started by the Department of Trade and Industry (DTI) in September 2018. The association says that several importers are ‘wary’ and have stopped imports, according to Philippine Daily Inquirer newspaper. Napoleon Co, president of the PCIA, said that although local cement producers have started building new plants it will take three or four years for these to start production. In the meantime, he argued, importers are required to meet market demand. He added that import tariffs on cement would also add costs to end consumers.

Dominican Republic: The Dominican Association of Portland Cement Producers (ADOCEM) says that the local industry is on track for 4.1% year-on-year growth in cement consumption in 2018. This follows a decrease of 2% in 2017, according to the Acento newspaper. The association’s president Rayza Rodriguez forecast the growth was likely to continue in the short to medium term.

Spain: Jesús Ortiz, the president of Oficemen the Spanish cement association, forecasts that exports of cement will drop by 20% year-on-year in 2019. He has blamed the situation on high electricity prices, according to the El Economista newspaper. He predicts that the local industry will have a capacity utilisation rate of 53% in 2019. He added that residential house construction was growing, but that the share of non-residential building had fallen.

India: The Cement Manufacturers Association has forecast growth above 10% in the 2019 financial year to the end of March 2019. It is expecting growth to be supported by the government's increased spending on large-scale infrastructure projects and growing residential housing, according to the Press Trust of India. It follows growth of around 13% year-on-year in the first half of the year. If growth stays at above 10% in 2019 it will be the fastest increase since the industry slowed down in 2011. The association is also attempting to lobby the government to lower the 28% tax rate applicable under the General Service Tax.