Displaying items by tag: CANACEM

US President Donald Trump threatened tariffs on imports from Canada, China, Mexico and the European Union this week. Tariffs to Canada and Mexico were announced on 1 February 2025 and then paused for a month to allow for negotiations. Ones to China have been implemented. Tariffs to the European Union have been proposed but nothing has happened yet. What does this mean for the cement sector?

Graph 1: Imports of cement and clinker to the US. Source: USGS. Estimated data for 2024.

The data suggests that whacking 25% tariffs on cement imports from Canada and Mexico would have an impact. The US imported 26.5Mt of cement and clinker in 2023. Based on United States Geological Survey (USGS) data from January to October 2024, imports in 2024 have fallen by 8% year-on-year but they still represent a large chunk of consumption. Türkiye has been the biggest source of imports over the last five years but Canada has been the second biggest supplier. Together with Mexico, it provided over a quarter of imports in 2023. A similar share is expected in 2024. Greece, a country in the EU, has also been present in the top five importing countries to the US during this time.

The Portland Cement Association (PCA) reinforced this view. In a carefully worded statement it took pains to point out alignment with the intentions behind the tariffs, such as appreciating that the administration was open to negotiation and appeared to be flexible. However, it warned that the moves could adversely affect energy and national security, delay infrastructure projects and raise costs. It pointed out the import share from Canada and Mexico, adding that this represented nearly 7% of the US’ cement consumption. It noted which states were the main entry points for cement imports from the two countries. Finally, it highlighted the high level of consumption (36%) that imports from Canada might account for in northern states such as New York, Washington and so on. Meanwhile, Mexico’s National Chamber of Cement (CANACEM) warned that the proposed actions might trigger a ‘competitiveness crisis’ in the US.

Holcim’s CEO, by contrast, nonchalantly told Reuters that he didn’t expect any impact by tariffs on his business. Miljan Gutovic described the group’s US operations as a local business with production happening in the country and equipment and spare parts all being sourced locally. This optimistic view is likely to be influenced by the company’s impending spin-off of its US business. The listing in the US remains scheduled for the first half of 2025 with no complications expected from tariffs.

Clearly, implementing tariffs on imports of cement and clinker from Canada and Mexico could cause a shortage in the US in the short term. This, in turn, could lead to higher prices for consumers in the US. This potential effect would be pronounced in border regions that are reliant on imports. It is worth noting that a number of production lines in both Mexico and Canada have previously been mobilised to meet the export market to the US. These lines would likely be mothballed if tariffs were to be implemented, unless they could find other markets. In the medium term though, as the World Cement Association (WCA) pointed out this week, the world produces too much cement. So it looks likely that the US cement market would adjust to a new equilibrium. Taxing imports from the EU would have a similar effect. Although it seems like it would be less pronounced for the US cement market unless it was in conjunction with tariffs to Canada and Mexico. It would certainly be bad news for cement producers in Greece.

Cement producers in the US look set to benefit from tariffs as demand for their products and prices could increase. There is a risk that too sudden a change to the import market could cause adverse market effects through shortages. Many of these companies are multinational groups with headquarters in foreign countries. However, the strength of the US market compared to elsewhere has prompted some of these businesses to become more ‘American’ through listing in the US or focusing merger and acquisition activity in North America.

At this point we’re stuck in a half-way house place where import tariffs have been threatened and negotiations are pending. The relatively muted stock market reaction to the tariffs and Trump’s swiftness in enacting pauses suggest that it is brinkmanship by the US administration. If this situation continues for any length of time then it will likely have an effect all of its own. In which case don’t expect any export-focused investment by cement companies in Canada and Mexico any time soon.

Mexico: The Mexican National Chamber of Cement (CANACEM) has warned that the US government’s proposed reimposition of a 25% tariff on imports of cement from Mexico may trigger a ‘competitiveness crisis’ in the US, with dire consequences for North America as a whole. Mexico exported 1.5Mt of cement to the US in 2024. This corresponds to 7% of US cement imports and 1.4% of the country’s total consumption. The El Norte newspaper has reported that CANACEM sees the current situation as an opportunity for Mexican and US policymakers and stakeholders to increase their mutually beneficial initiatives, citing the example of a proposed Carbon Border Adjustment Mechanism (CBAM) on a region-wide scale.

CANACEM president José María Barroso said "In addition to incentivising more sustainable production, this would promote greater integration and strengthen the regional market. The Mexican cement industry is ready to work with our government and our trade partners to find solutions that promote greater regional integration."

Mexico: The National Cement Chamber (CANACEM) has appointed Julio Cedeño as its General Director. He previously worked as the Director of Institutional Relations for the Camara Nacional de la Industria del Hierro y del Acero (CANCERO), an organisation representing the steel sector in Mexico. Cedeño is a graduate of the Universidad Iberoamericana in Political Science and Public Administration.

CANACEM represents the six cement companies in Mexico: Cementos Moctezuma, Cemento Cruz Azul, Cemex México, Grupo Cementos de Chihuahua, Holcim México and Cementos Fortaleza. 35 cement plants operate in the country producing nearly 47Mt/yr of cement and employing over 26,500 people. The organisation was originally founded in 1948.

Mexico: Mexico's major cement producers predict modest growth in 2024 as some government infrastructure projects conclude and budget reductions take effect. These companies, including Cemex, Grupo Cementos and Holcim, have benefited from large-scale projects under President López Obrador but now face a tempered outlook.

General construction activity in Mexico grew in 2023, with a 15.6% increase driven by civil works, increasing the construction industry's GDP to US$94bn. However, with the completion of projects like the Mayan Train and anticipated budget cuts, growth expectations have cooled.

The National Cement Chamber forecasts a 2% rise in cement consumption in 2024, reaching 46.4Mt. Cement producers are adjusting strategies, with Cemex focusing on European markets and Holcim investing in plant expansions in Mexico, including a US$55m investment in its Macuspana plant in Tabasco.

Mexico: Members of the National Cement Chamber (Canacem) are set to reduce cement bag weights from 50kg to 25kg to comply with NOM-036, according to El Financiero, which aims to prevent and control musculoskeletal and ergonomic diseases in construction workers. The shift affects companies such as Cemex, Cementos Moctezuma, GCC, Cemento Cruz Azul, Cementos Fortaleza and Holcim.

The standard came into effect on 31 March 2024, but Cementos Moctezuma has already started transitioning to 25kg bags. José Barroso, CEO of Cementos Moctezuma, said "Since 2023, Cementos Moctezuma began the transition from 50kg to 25kg bags in all of its packaged product family.” He added "In Mexico, musculoskeletal disorders represent almost half of the occupational injuries, so we are already implementing changes in our plants to operate according to the new standard.”

Mexico: The National Cement Chamber (CANACEM) has appointed José María Barroso as its CEO. He will follow on from Jaime Hill Tinoco, the head of Holcim México, in the role, according to the El Financiero newspaper. Barroso’s tenure will cover the 2024 – 2025 period.

Barroso is a graduate of the Instituto Tecnologico de Merida in Yucatan and he also holds a master’s degree in international trade form the same institution. He holds over 40 years of experience in the cement sector working both nationally and internationally for Cemex. He joined Cementos Moctezuma in 2010 as its Sales Director before becoming its Director General in 2018.

Mexico: The National Cement Chamber (CANACEM) has established a collaboration agreement with the State Congress of Jalisco. Under the agreement, the parties will collaborate towards the reduction of CO₂ emissions from the cement sector in the state. Local press has reported that the collaboration will include studies, projects, proposals and legal initiatives.

The state government said that the cement sector drives economic development and supports 20,000 jobs through its vital part in the construction industry.

Mexico: Cement production in Mexico grew by 24% year-on-year to 56Mt in 2020. This was its highest figure in the last five years, according to BNamericas. Data from INEGI, Mexico’s national institute of statistics, shows that production in January 2021 grew by 14.5% year-on-year to 4.2Mt. Yanina Navarro, the director of the National Cement Chamber (CANACEM), said that consumption changed in 2020 to favour bagged cement over bulk. She added that cement production was allowed to continue through coronavirus-related lockdowns in 2020 as it was classified as an ‘essential’ industry.

Mexico: The Mexican Association of the Ready-Mix Concrete Industry (AMIC) has joined the National Cement Chamber (CANACEM). Jaime Rocha Font, president of CANACEM, said that the inclusion of AMIC would better reflect the cement and concrete sector and aid its work with regulators, according to the El Sol de Mexico newspaper. AMIC was created in 1958 and brings together 42 ready-mix concrete production companies that operate 410 concrete plants and represent 70% of local concrete production.

Mexico: Jaime Rocha Font, the president of the National Cement Chamber (CANACEM), says that cement sales fell by 2% year-on-year in the first half of 2020 due to low demand from construction companies and the private sector. He added that sales fell by 6.3% year-on-year in the second quarter of 2020, according the El Financiero newspaper. Annual sales were 43Mt in 2018 and 40Mt in 2019.