Displaying items by tag: Import
Czech cement production rises 4.1% in 2016
31 August 2017Czechia: Cement production in Czechia grew by 4.1% year-on-year to 3.94Mt in 2016 as consumption rose by 3.9% from 3.82Mt, according to data from the Association of Cement Producers. The production figure was 17% lower than the country’s record of 4.77Mt that it made in 2007.
Speaking to the Czech News Agency the association's secretary, Jan Gemrich, said, "In 2016, one of the dominant areas was the extension of the transport network, chiefly the reconstruction of the D1 motorway, which is to last until about 2020. Another important area, though stagnating at present, is new housing construction for young families." For 2017 Gemrich expects cement consumption to record annual growth of around 3%.
Cement exports increased by 8.5% year-on-year to 585,000t, accounting for about 15% of national output. Imports grew by 7.7% to 463,000t.
PPC highlights import risk to Colleen Bawn plant
29 August 2017Zimbabwe: PPC Zimbabwe has hinted that it may be looking to shut down its Colleen Bawn Cement plant in Gwanda, citing pressure from cheaper imported clinker as well as smuggled cement coming over the border. If it decides to close the plant, the move would represent a significant blow for PPC Zimbabwe and PPC’s wider activities outside of its native South Africa.
The management has appealed to the government for protection, stating that, unless measures are put in place to curb cheap imports, the firm risks losing its investment at Colleen Bawn. It estimates that a wider community of around 4000 rely indirectly on the plant for their livelihoods. The plant has been in operation for more than 70 years.
Country managing director Mr Kelibone Masiyane said, “The cost of production is very high in Zimbabwe when compared to the rest of the region. Our competitors are importing clinker at cheaper cost and they are jumping the production process. The biggest challenge here at Colleen Bawn is that we incur huge costs producing clinker and because of this there is a risk of closure of the plant and opting to import clinker as well.”
However, Masiyane expressed confidence that the engagements PPC Zimbabwe was having with the government would result in ‘fruitful’ interventions that would protect the firm and avert negative effects. He said that the company’s major cost driver was electricity costs, which are much higher than in neighbouring countries.
In response Deputy Minister Mabuwa said that the government appreciated the strategic economic role of the cement manufacturing sector and would address the plight of PPC. She concurred that, while cement was removed from the open general import license, continued clinker imports were having a negative effect on the value chain.
Cement producers ‘waive’ inspection exemption
29 August 2017Philippines: Three of the Philippines' largest cement manufacturers have offered to waive their exemption from inspection procedures for cement imports, which are currently required only from companies that just import cement. They sent a joint letter to the Trade and Industry Secretary Ramon Lopez via Ernesto Ordonez, president of the Cement Manufacturers Association of the Philippines on 24 August 2017. In the letter, Taiheiyo Cement, Cemex and Republic Cement state that they are willing to undergo the same shipment inspection procedures as the traders. Ordonez said the offer was aimed at fostering industry harmony and ensuring adequate supply for the Duterte government's infrastructure push.
However, Atty Vic Dimagiba, president of consumer group Laban Konsyumer, said it was misleading for Ordonez to say that the cement firms have offered to waive their import shipment privilege because the Bureau of Product Standards of the DTI has already come up with a draft Department Administrative Order that will require all cement importers to undergo inspection procedures regardless of the company’s status. Existing legislation had come under fire as it allowed double standards.
Philippines: The Philippine Cement Importers Association (PICA) has supported the Department of Trade and Industry’s measures to regulate cement imports. The association has also proposed that imported cement be tested upon entry, according to the Manila Standard newspaper.
“The PCIA is categorically against importation of sub-standard cement. In fact, the PCIA has proposed to take an active part in monitoring and enforcement against sub-standard cement whether imported or locally manufactured,” said PICA’s executive director Dani Enriquez. He added that sub-standard cement would be bad for business and the country’s infrastructure program.
Chinese ripples on the Pacific Rim
16 August 2017After a couple of weeks looking at the capacity-rich cement markets of Angola and Vietnam, we turn our attention this week to some of those countries on the receiving end of overcapacity.
Costa Rica is an unlikely place to start but it came to our attention this week due to a short but significant news item. In summary, the amount of cement imported into Costa Rica increased by a factor of 10 between 2014 and 2016, from around 10,000t to over 100,000t. This is around 5% of its 2Mt/yr domesitic capacity, so the change is already fairly big news. The fact that an incredible 97% of this came from just one country, China, makes the story far more interesting as it shows the effects that Chinese overcapacity can have on smaller markets.
But when we look at how the value of the cement imports has changed over time, we see an even more dynamic shift. While the amount of cement imported into the country increased by nearly 10-fold, the value of the same imports only increased by around half as much between 2014 and 2016. If these figures can be taken at face value, the implication is stark. Taking the very low base as effectively ‘zero,’ each tonne of cement imported must cost around half as much as it used to.
Digging a little deeper and the picture gets more complicated. While they have fallen, Costa Rican cement prices have not fallen by 50% and why the sudden deluge of imports anyway? In 2015 the country changed its rules on cement imports to facilitate more flexible imports and lower prices for consumers. It did this by changing a regulation relating to how long cement can be stored, previously set at just 45 days, with the aim of allowing cement to come from further afield and, crucially, in bulk rather than bags.
The effects on price were immediate. Previously as high as US$13/bag (50kg) in December 2014, fairly high by global standards, Sinocem, the first Chinese importer, immediately sold its first shipment at US$10/bag. This effect of lower prices has now forced the average sales prices down to around US$10/bag across the country by 2017. This is good for consumers but not necessarily the local plants.
Back in 2015, the two local integrated plants operated by Cemex and Holcim warned that cement quality would suffer if cement bags were not used within 45 days. This apparently self-serving ‘warning’ went unheeded by the Ministry of Economy, Industry and Trade (MEIC), which pointed out that other countries in South America, as well as the European Union and United States, had no analogous short use-by dates for cement bags.
The rule remains in place, although discontent rumbles on. Indeed LafargeHolcim noted in its third quarter results for 2016 that ‘Costa Rica was adversely affected by increased foreign imports.’ This may well be a little bit of posturing and it doesn’t square with the fact that Costa Rica exported three times more cement that it imported in 2016. Of total exports of 0.34Mt, over 95% went to neighbouring Nicaragua, which has a single 0.6Mt/yr wet process plant owned by Cemex. It seems that the two Costa Rican plants have found a way to keep a little bit of the Chinese producers’ margin for themselves.
Of course, Chinese cement overcapacity doesn’t only affect the Central American market. It has been rippling all around the Pacific Rim. In July 2017, this column looked at the decision by Cementos Bío Bío to stop making clinker at its Talcahuano plant in Chile. It now favours grinding imported clinker from Asia. Before that, Holcim New Zealand closed its Westport cement plant in 2016, finally admitting that domestic clinker was not viable.
In the grand scheme of things, this all makes sense. The market has forced those operating on thin margins to adjust. Ultimately, the end consumer is likely to benefit from lower prices, at least for as long as reliable low-cost imports can be secured. What happens, however, if China actually gets round to curtailing its rampant cement capacity, or simply decides to charge more for its cement? Flexible imports, the main aim of the Costa Rican rule change, may then prove vital, as long as there is more than one international supplier of cement.
Costa Rican cement imports soar 10-fold
15 August 2017Costa Rica: According to a report released by the government trade promotion agency Procomer, imports of cement into Costa Rica expanded from 10,418t in 2014 to 107,294t in 2016, representing a growth of 930% in only two years. Approximately 97% of the 2016 figure corresponds to cement imports from China, which is now the main origin of imported cement in the country.
In value terms, cement imports reached US$18.3m in 2016, only 5.4 times more than in 2014. Cemex and Holcim are the main cement manufacturers operating in Costa Rica. If the import volumes and prices are to be taken at face value, domestic plants would appear to be under increasing price pressure from the imported cement from China.
Stronger cement demand in Argentina
07 August 2017Argentina: Cement production rose by 18.8% year-on-year to 1.01Mt in Argentina in July 2017, according to data from the local cement association AFCP. Sales including exports also climbed by 18.8%, rising by 0.9% compared with June 2017. Domestic sales, including imports, rose by 19.8% in July 2017. Domestic consumption totalled 1.01Mt in July 2017, around 1% above national consumption in June 2017.
Philippines: The Department of Trade and Industry has confirmed its support for a plan to require cement importers to secure licenses and clearances for their products. Trade Secretary Ramon Lopez backed the plan first issued in February 2017, according to the Philippines Star newspaper. The Department Administrative Order requires the application of the Philippine Standards licenses on foreign producers of cement imports and import commodity clearance on cement imports, as well as setting a minimum paid capitalisation of US$0.4m for all cement importers. The measures are intended to support domestic self-sufficiency in the cement industry.
Pacific Cement to import cement from Vietnam
02 August 2017Fiji: Pacific Cement plans to import 25,000t of cement from Vietnam due to supply shortfalls from local plants. The increase in demand has been attributed to increased construction activity in the country, according to the Fiji Sun newspaper. Pacific Cement is currently running at reduced production levels whilst it waits for spare parts to arrive. It plans to return to full production in October 2017. The producer is also wants to install a cement mill in early 2018 to increase its production capacity.
Ethiopia: Requests from 20 cement producers have led the Ethiopian Petroleum Supply Enterprise (EPSE) to start a tendering process to procure coal. Four international firms have reached the preliminary technical evaluation stage of the tender to procure 0.7Mt of coal, according to the Addis Fortune newspaper. The majority of the coal, around 0.6Mt, will be imported for the cement producers with the remainder going to steel and ceramics producers. The process excludes Derba Cement, which has its own arrangements to import coal in place. EPSE is expected to award the bid by the end of July 2017.
Ethiopia imports over 0.75Mt/yr of coal, of which more than 75% is for cement production. More than half of the energy consumption of the country’s cement plants is derived from coal.