Global Cement News

Uzbekistan/Afghanistan: The Almalyk Mining and Metallurgical Combine plans to ship several batches of high-quality cement to Afghanistan by the end of 2019, according to a company press statement. It elaborated that it had signed a number of contracts for the supply of three products in mid-July 2019. Its cement will be used in the construction of infrastructure and social facilities in several regions of the country. Deliveries will be made from the group’s Jizzakh and Sherabad plants.

The company is also actively increasing exports to other neighbouring countries. The Jizzakh cement plant has already exported over 1600t of white cement to Tajikistan, 1280t to Kyrgyzstan, 512t to Kazakhstan and 147t to Turkmenistan in 2019. Over the first half of 2019, the plant exported over 28,000t of cement products at a value of more than US$1.6m.

Taiwan: Taiwan Cement Corp has reported that its net income for the first half of 2019 increased by 11.7% to US$356m. However, its cement sales were lower year-on-year compared to the first half of 2018. The income was improved by contributions from its coal-fired power plant in Hualien County.

The company said that it remains positive with regards to the second half of 2019, as the rainy season is over, which is expected to boost cement demand and prices.

Separately, Asia Cement reported that net income soared by 46.5% year-on-year in the first half of 2019, predominantly thanks to record-high profits generated by its Chinese operations.

Philippines: Trade Secretary Ramon Lopez has welcomed a Tariff Commission (TC) report that has increased the safeguard duty on imported cement, but noted that his department was still reviewing the evaluations made.

Speaking on 14 August 2019, Lopez said, "We just got the full report on cement from the TC and will study the evaluations made. We welcome the finding that there was injury to the industry and that the safeguard duty should be US$5.65/t or US$0.23/bag (40kg)." The TC report said the US$0.23/bag safeguard duty was the difference between the weighted average landed cost of imported cement and the average domestic ex-plant selling price of the local cement industry for 2018.

Lopez earlier claimed that imports of cement increased from only 3558t in 2013 to more than 3Mt in 2017. The share of imports increased from only 0.02% to 15% during the same period.

One of the summer news stories in the UK has been the drama surrounding the near-failure of dam near Whaley Bridge in Derbyshire. Concrete slabs on an overflow spillway fell away after a period of heavy rain leading to fears that the dam could fail inundating the area. Around 1500 local residents were evacuated for about a week as a precaution until the reservoir’s water level could be pumped down low enough for inspection.

No one was hurt in the incident but it has raised questions about the maintenance and renewal of infrastructure and how this fits with changing weather patterns caused by anthropogenic climate change. A sadder example of this is the collapse of the Morandi Bridge in Genoa, Italy in August 2018 that killed 43 people. This was later blamed on decaying steel rods in the structure. There have been similar debates in the US with President Donald Trump’s on-going attempts to push through a US$2tn infrastructure bill to repair the country’s structures. Although, predictably, it is floundering on the question of who is actually going to pay for it all.

In the UK, for example, cement production hit a high of over 15Mt in the late 1980s before declining to a low of 7.6Mt in 2009 and eventually climbing to above 9Mt/yr since 2015. A big cause of that decline was the 2008 financial crash and the subsequent government austerity policies. Yet, even with this taken into account, production was at around 11Mt/yr in the 2000s. How much, if any, of this production capacity gap of at least 4Mt between the late 1980s and the 2000s might be needed to maintain the country’s infrastructure? Southern Mediterranean countries like Spain and Italy offer even starker examples. Italy’s cement production fell to 19.3Mt in 2017 from nearly 40Mt in 2001. Spain’s production hit a high of around 50Mt/yr in 2007 with apparent production (local consumption and exports) falling to around 20Mt in 2018. Much of these declines are due to loss of export markets but the same basic questions remain about how much capacity will be required in the future to maintain and repair existing structures in developed nations. This could be imported but the usual constraints about moving heavy building materials around inland mean than at least some of this cement will need to manufactured locally.

The International Energy Agency (IEA) estimated in 2010 that the world would need 50Bnt of cement between 2015 and 2030. The global cement industry was already producing around 3.5Bnt/yr in 2015 according to the Global Cement Directory 2015 giving it overcapacity even then towards the estimated target. Global production capacity is just under 4Bnt/yr today. Estimates for the cost of global infrastructure requirements in this period range from US$1Tnr/yr to US$6Tnr/yr. The majority of this will go towards new infrastructure in developing countries but a minority portion will be required for maintenance. One study by the Brookings Institution and the Global Commission on the Economy and Climate estimated that developed countries would need around US$2Tn/yr for their infrastructure bills.

A study by management consultants McKinsey & Company in late 2017 reckoned that there was a worldwide US$55Tn spending gap between then and 2035 for infrastructure spending. It estimated that countries like the UK, Germany and the US needed to increase their annual spending on infrastructure as a percentage of gross domestic product (GDP) by 0.5%. Although Italy only needed to improve by 0.2%. Looking at the change in infrastructure investment rates suggests that the European Union (EU) actually started to improve its investment from 2013 to 2015 by 0.2% but that the US did not.

All of this goes to show that the show is definitely not over for building materials producers in developed countries. These industries may be mature but they should not be complacent. Roads need patching up, bridges need replacing and all sorts of other infrastructure projects are required even in places that have them already.

South Africa: The South African cement industry is calling on the International Trade Administration Commission (ITAC) to probe a flood of imports into the country. South Africa, which has six cement producers and more than 30% over-capacity, has become a net importer of cement. Imports have increased by 139% since 2016, according to The Concrete Institute’s (ITC) managing director Brian Perrie.

Perrie said in an interview that TCI, representing AfriSam, Dangote Cement South Africa, Lafarge Industries South Africa, Natal Portland Cement and PPC were approaching ITAC to investigate whether the industry required protection from an 18-month surge in imports.

He said that imported cement was undercutting South African prices by as much as 45%, while local producers also had to meet the requirements of the Southern African Customs Union (SACU), meet black empowerment and other social requirements and, at the same time, protect thousands of jobs in the domestic industry. Also, the recent carbon tax translated into a 2% increase in selling prices, putting the local industry at a further price disadvantage. “Trade remedy protection is required," said Perrie, pointing out that producers did not want a ‘ban’ on imports, rather some form of protection to ‘level the playing field.’

South Africa instituted anti-dumping duties of 17 – 70% against importers from Pakistan in 2015. Imports duly fell in 2016 but rose again in 2017 and 2018, mainly from Vietnam and China. Perrie said that 350,441t of cement arrived in the second quarter of 2019 alone, the most since the third quarter of 2015. Most came in through Durban (260,909t), an 85% increase on the first quarter.