Displaying items by tag: Government

US: The Portland Cement Association (PCA) reports that cement consumption rose by 3.6% year-on-year in the first 11 months of 2021. Ed Sullivan, Senior Vice President and Chief Economist at the PCA, made the announcement at the World of Concrete trade fair in Las Vegas, Nevada. He also forecast that cement consumption would be driven by non-residential and public works in 2023 and 2024 as mortgage rates increased. The country is also set to spend US$1tn on new and rehabilitated infrastructure projects and this would consume 46Mt of cement over a five-year program. Over a quarter of this amount would be used on roads, bridges and resiliency structures.

The PCA’s president and chief executive officer Mike Ireland and Senior Vice President of Sustainability Rick Bohan also spoke at the event to further promote the association’s Roadmap to Carbon Neutrality.

Ghana: The Ministry of Health has responded to criticism from the Chamber of Cement Manufacturers (COCMAG) about disinfection measures being used at ports. It said that it was being used to on the exterior of imported goods and cargo to control or kill infectious agents. It added that the procedure was being implemented on any vehicle that crossed designated biosecurity zones without exception.

“It is obvious that COCMAG, of which you are the executive secretary, does not have much information about the disinfection health service, its applications and the benefits of such a service,” said the ministry in a statement in response to comments in the local press by COCMAG’s leader George Dawson-Ahmoah. It added that the fee for the service was to protect the local economy from the effects of diseases such as Ebola and Covid-19 and that sea ports were, “one of the most infected areas in the country.”

COCMAG has lobbied the government to scrap the disinfection or fumigation levy on cement imports at the country’s ports. It argues that such measures are unnecessary for dry cargo such as clinker, limestone, and other cement raw materials, according to the Ghana News Agency. The levy adds a reported US$0.50/t of cement.

The cement output data for December 2021 is out for China and we’re starting to see the effects of a rather tough autumn. Lower coal supplies, consumer prioritisation for energy supplies, higher input costs and a slowing real estate market all contributed to a reduction in output.

Graph 1: Cement output by quarter in China, 2019 –2021. Source: National Bureau of Statistics of China.

As can be seen in Graph 1 above, output took off after the shock of the coronavirus outbreak receded at the start of 2020. This then continued until mid-2021 when things changed. Overall cement out was 2.36Bnt in 2021, an annual drop of nearly 1.2% compared to 2.39Bnt in 2020. Note that the 2021 output figure is about average for China’s annual output since it hit a high of nearly 2.5Bnt in 2014. However, the months from September 2021 onwards have seen output drops of above 10% year-on-year. It’s been from a high base but if it were to continue it could signal a more ominous trend. As the China Cement Association (CCA) describes it, cement output started to slow from May to August 2021, in part due to seasonal factors and repeated local outbreaks of Covid-19 around the country. This trend then started to accelerate for the reasons mentioned above.

Looking at energy first, coal future prices in China hit a near-decade high in October 2021 due to a variety of market disruptions. This looked set to worsen at the start of January 2022 when the country’s biggest overseas supplier, Indonesia, banned exports for a month due domestic shortages. However, data has since emerged this week from the National Bureau of Statistics showing that Chinese coal production grew by 4% year-on-year to 4.07Bnt in 2021, with faster monthly growth, as the industry ramped up output to meet demand.

On the real estate market, the CCA views it as having run ‘hot’ and then ‘cold’ in 2021. At the start of the year the government introduced new government regulations (its so-called three red lines of policy) to reduce borrowing in the sector. The real estate market subsequently declined, not withstanding certain hot-spots. In the western press this process has been symbolised by the fortunes of Evergrande and its debts of over US$300bn. It started missing bond payments in September 2021 before formally defaulting in December 2021. As the Financial Times newspaper reported in a summary on the situation, in late December 2021, Evergrande said that work at 92% of its projects, which number in the hundreds across China, had resumed. Separate data though showed that its housing sales had slumped by 99% year-on-year in the same month. The newspaper has compared the Chinese government’s approach to Evergrande to its handling of conglomerate HNA Group, which was eventually declared bankrupt in 2021 after a slow disintegration. In its opinion the government may try to control the collapse of Evergrande through a series of quiet interventions over a long period. However, Evergrande’s debts appear to be double those of HNA Group’s and there may be further risks from other companies in the real estate sector. All of this presents risks to local cement output.

To round up, Chinese cement output in the second quarter of 2022 is the figure to watch to assess how well the industry is coping with its current issues. Production is likely to slow in the first quarter due to seasonal factors such as the New Year holidays, winter shutdowns and the hangover from the problems in the autumn. Once the spring arrives then we may have a glimpse of how cement companies are coping with coal supplies, the real estate market and all the rest.

And finally... Global Cement Weekly invites readers to explore Austria-based W&P’s virtual tours of three of its plants. The presentation is a fancier version of the panorama photo applications one can find on most smartphones but with some added mapping and visualisation settings. It’s a fantastic addition to the set of community outreach tools a cement company can use. Check it out here: https://alpacem.com/360/

Philippines: The Fiscal Incentives Review Board (FIRB) has approved the grant of tax incentives to San Miguel Equity Investments a for the construction of its 2Mt/yr Mindanao cement plant. The Manila Bulletin newspaper has reported that the producer will pay no tax on its income from the plant during its first two years of operations, and reduced taxes during the subsequent five years.

The FIRB said that it expects the US$195m plant to stimulate downstream businesses, promote the use of energy-efficient equipment and lead to a transfer of knowledge and increased productivity in the underdeveloped area where it will be located.

Kazakhstan: Steppe Cement sold US$83.4m-worth of cement in 2021, up by 16% year-on-year from its US$71.7m-worth in 2020. Its sales volumes totalled 1.69Mt for the year, up by 2.4% from 1.65Mt in 2020. It exported 202,000t of cement, down by 57% from 86,500t. The company said that production limitations prevented it from fully meeting demand, and it concentrated on local markets. Regarding its outlook in 2022, Steppe Cement said “We have a healthy cash balance and are continuing our capital expenditure (CAPEX) programme to increase the production capacity of the company by 5% by mid-2022.”

Dow Jones Newswires has reported that Kazakhstan’s 2021 full-year cement consumption was 11.6Mt, up by 23% year-on-year from 9.4Mt in 2020. A rule change to pension withdrawals permitting allocations for home improvement and construction bolstered demand growth. Exports fell by 20% to 1.6Mt from 2Mt, while imports rose by 33% to 800,000t from 600,000t.

China: Saudi Aramco and China Building Materials Academy (CBMA) have launched the Nonmetallic Excellence and Innovation Center (NEXCEL) in Beijing. The centre will leverage CBMA's expertise and resources to promote the development and application of nonmetallic technologies offering superior lifecycle cost, efficiency and environmental performance to metal-based alternatives in Chinese construction.

Saudi Aramco’s senior vice president of technical services Ahmad Al-Sa'adi said “We are excited to be part of this important initiative with CBMA, to jointly advance the use of nonmetallics in building and construction in China. At Aramco, we have been developing and deploying nonmetallic solutions within our own operations for more than 20 years as they offer superior lifecycle cost, efficiency and environmental advantages over their metal alternatives.”

Burundi: The Ministry of Commerce, Industry and Tourism has asked the Burundi Cement Company (BUCECO) to hold a consultation with the government about price rises the company announced at the end of December 2021. It also requested that the cement producer suspend the change in prices, according to the Le Renouveau newspaper. In correspondence the ministry reminded the company that it had benefited from tax and customs breaks previously agreed with the government under the Burundian Investment Code.

India: Axis Bank subsidiary Axis Securities has predicted a 4 – 6% year-on-year drop in Indian cement sales volumes during the third quarter of the 2022 financial year, which ended on 31 December 2021. The Hindu newspaper has reported the reasons for the predicted drop as extended monsoons, especially in the south of the country, and a construction ban in the National Capital Region due to pollution. Monthly sales grew slightly year-on-year in December 2021.

Axis Securities has also forecast a revival of demand in the fourth-quarter, driven by infrastructure and housing projects. Overall, it expects national demand for cement to grow by 8 – 9% in the 2022 financial year.

India: Locals in Odisha’s Malkangiri district gathered in the town of Katamataru on 9 January 2022 to protest plans for the establishment of a new Dalmia Cement (Bharat) cement plant in the area. The New Indian Express newspaper has reported that protestors allege that the state government did not conduct the proper tendering procedures for the proposed plant. More than 2000 people, wielding traditional tribal weaponry, gathered at an assembly. They resolved not to vote at upcoming village council elections if the government continues not to listen to their objections.

Uzbekistan: The state assets management agency UzAssets has agreed to sell the Uzbek government’s 87% stake in Qizilqumcement for US$174m, according to the UzDaily newspaper. Under the terms of the deal, United Cement Group will maintain the plant’s personnel and the level of their pay, implement the approved modernisation programme and continue to provide training, support social projects in Navoi region and organise events in the community.