Displaying items by tag: GCW435

In case you’ve missed it there’s been a boom in cement demand in China during the current quarter. Henan province saw a run on cement prices in November 2019 that the local press described as ‘crazy.’ Some companies were issuing price adjustments twice a day, according to the China Cement Association. The article on the CCA’s website also includes a video showing dozens of cement trucks queuing at a mill with the caption ‘all the plants are like this, don’t ask the price any more.’

The CCA’s blamed the situation in Henan on pollution controls on production and a rebound in cement demand. Weather-based pollution controls enacted in late October 2019 shut-down or limited production at 66 of the province’s 72 clinker production lines. Builders were then forced to source cement from neighbouring Shanxi, Hebei and Shaanxi provinces. At the same time demand for cement from real estate and infrastructure sectors picked up in the fourth quarter of 2019. Following advice from the local cement manufacturers’ association, the provincial government relaxed the rules on peak shifting that normally run from November to February in a bid to control the situation. Cement prices in Henan hit a high in mid-to-late November 2019 and have since subsided somewhat.

Nationally, Chinese cement prices hit a high in late November 2019 beating the highest level in 2018 and also setting the highest price since 2011. The key regions driving the increase have been in central and south China, including Guangxi, Guangdong and Henan. One more thing to note here is that peak shifting or seasonal shutdown of production capacity has different dates in different provinces. So, potentially, the situation could repeat itself if unexpected demand continues and provincial governments fail to monitor the situation.

Recently a couple of economic indicators in China have suggested a recovery in infrastructure spending in recent months, supporting increased cement demand. Data from Wind quoted by the Financial Times newspaper suggests that the cement price rose by 15% since September 2019 in large cities. Reinforced steel (rebar) and aggregates prices have increased similarly. At the same time the South China Post newspaper has reported a growth in the Purchasing Managers’ Index (PMI), an indicator of manufacturing activity that could also point to renewed infrastructure spending. Central government is also reported to be taking measures to support provincial infrastructure development.

If true then this may be creating some pretty direct lessons in economic interventionism. The Chinese government appears to be stimulating demand for cement via infrastructure growth while restricting production at the same time. Cement prices have reacted in a ‘crazy’ fashion. The real tension here is between two conflicting desires: protecting the economy and protecting the environment. The state planners may be grappling with this one for a while.

Argentina: Holcim Argentina has appointed Christian Dedeu as its new chief executive officer (CEO) from January 2020. He is the first Argentine national to hold the position, according to the Mercado magazine. Dedeu graduated in economics from the Universidad del Salvador and he holds a MBA from the Universidad Austral (IAE) in Buenos Aires. He worked for ExxonMobil for eight years before joining Holcim in 2007. At LafargeHolcim he has worked in Argentina and Costa Rica in a variety of commercial, marketing and retail roles. He has been the commercial director for Argentina since January 2019.

Germany: Martin Stillger has been appointed as the chairman of the executive board of ThyssenKrupp Materials Services. This follows the appointment of Klaus Keysberg, who has moved to the executive board of ThyssenKrupp where he is now responsible for the businesses of Steel Europe and Materials Services.

Stillger has held various leadership and management positions at ThyssenKrupp Materials Services since 2008, most recently as chief executive officer (CEO) of ThyssenKrupp Schulte and the Western Europe and Technical Services operating units. Prior to joining ThyssenKrupp, the qualified mechanical engineer spent 17 years with Barmag, including five years as Chief Sales Officer and five as CEO. He will be succeeded as CEO of ThyssenKrupp Schulte and the Western Europe operating unit by Detlef Schotten, currently CEO of the Eastern Europe and Asia/Pacific operating unit, in January 2020.

In addition, Ilse Henne has also been appointed as Chief Transformation Officer (CTO) with immediate effect to drive transformation and growth. Previously she became Chief Operating Officer (COO) in January 2019 and this role will no longer be filled. The finance and human resources directorates on the board of ThyssenKrupp Materials Services will remain unchanged. Daniel Wodera will continue as chief financial officer (CFO) and Markus Bistram as chief human resources officer (CHRO).

Saudi Arabia: In a report on 17 Saudi cement companies including itself, Yamama Cement recorded a year-on-year increase of 24% in sales volumes to 4.27Mt in November 2019 from 3.45Mt the previous November. The volume produced was 4.30Mt, up by 22% from 3.54Mt in November 2018. Mubasher has reported that the country has 1.22Mt of cement in inventory, 3.8% more than the 1.18Mt it held at the end of November 2018. Southern Province Cement Company (SPCC) led the month’s sales, with 0.61Mt.

Venezuela: Venezuelan Chamber of Construction (CVC) president Mauricio Brin has estimated a capacity utilisation of 12.5% - corresponding to a production of 1.5Mt of cement from an installed capacity of 12Mt/yr. Noticias Financieras has reported that, according to Brin, production, which was hampered by power shortages, was sufficient to meet the construction sector’s demand. “Public construction has stalled and private investment is restricted to limited office developments in state capitals,” said Brin. He estimated a contraction of 95% year-on-year in construction compared to 2018.

US: A fire was successfully fought at Lehigh Cement’s 0.8Mt/yr integrated Tehachapi plant near Bakersfield, California on 8 December 2019. The Bakersfield Californian has reported that there were no injuries and no cause of the fire has been identified. Access difficulties exacerbated by extreme weather conditions caused fire crews to make two additional assistance calls.

Spain: The National Association of Mortar Manufacturers (AFAM) and the Association of Mortar Manufacturers and SATE (Anfapa) have announced their unification as a single organisation under the name of Anfapa. Alimarket has reported that the body will serve the interests of over 40 members and associates as ‘the qualified voice of an important subsector of the construction industry, giving it a broader and unanimous front.’

Netherlands: Germany’s HeidelbergCement’s subsidiary Eerste Nederland Cement Industrie (ENCI) announced on 9 December 2019 the upcoming closure of its former 1.8Mt/yr integrated Maastricht plant in 2020. Het Belang van Limburg has reported that the Maastricht plant, which stepped down to grinding-only in March 2019 after 91 years’ kiln operation, received an insufficient supply of clinker from ENCI’s sister company CBR Cement’s 1.5Mt/yr Lixhe plant in Wallonia, Belgium to guarantee profitable production.

Clinker grinding continues at ENCI’s 1.4Mt/yr IJmuiden and 0.6Mt/yr Rotterdam grinding plants, each of which has better access to clinker imports due to their proximity to deepwater ports.

US: Colombia’s Cementos Argos has sold 28 ready-mix concrete plants. ValorFuturo has reported that Smyrna Ready Mix Concrete (SRM) has acquired the company’s Arkansas, Georgia, South Carolina and Virginia assets. Cementos Argos stated that the reason for the divestments was the failure of the plants to generate operational efficiency due to their small and isolated nature.

In 2018 Cementos Argos produced 5.3Mm3 of concrete at its 236 ready-mix plants in the US region, making it the second biggest domestic producer after Cemex. It ranked fourth for cement production over the period, supplying the US market with 4.7Mt of cement from its four integrated and three grinding plants.

Indonesia: Switzerland-based Sika has begun producing concrete admixtures and mortars at its Bekasi plant on the island of Java. “This new facility in Greater Jakarta will enable us to further expand our strong position relative to the rapidly growing demand for quality building materials in Indonesia,” said Sika Regional Manager Asia/Pacific Mike Campion. He noted a Euro293m infrastructure investment by the government of Indonesia, Asia’s fifth-largest construction market, which he predicted will grow at 7% for the next 10 years.