Displaying items by tag: Government

India: The Securities and Exchange Board of India (SEBI) has fined Jaypee Infratech US$9140 for its failure to disclose its issue of a series of non-convertible debt securities. The company additionally failed to inform the BSE exchange of defaults in payment with respect to some of the series.

Philippines: The government’s Department of Environment and Natural Resources – Environmental Management Bureau has called on cement producers to maximise their use of waste plastic as a raw material in cement production. Philippines News Agency has reported that bureau director William Cuñado estimated that the measures would bring about a 40 – 60% drop in national plastic waste generation. He said that local government has a part to play in arranging the requisite municipal solid waste (MSW) practices.

Pakistan: The Cabinet Committee on Legislative Business of the Punjab government has licenced the establishment of a new cement plant in the state. The News newspaper has reported that the committee also approved the expansion of two existing cement plants.

UK: The Mineral Products Association (MPA) has urged the the UK government to reduce energy costs, maintain mineral products companies’ access to low-tax red diesel and to deliver on planned infrastructure investments. The association says that high costs already threaten its member’s competitiveness against EU-based rivals. The Ukraine crisis has caused energy costs to rise, while mineral products companies expect their rebate for red diesel to end on 1 April 2022. The MPA has asked the government to delay the end of the red diesel rebate. It also called for transparency on the delivery of the government’s infrastructure plans.

CEO Nigel Jackson said “The high ambitions the government has set out for the UK’s infrastructure and housing rely on our members’ ability to supply aggregates, asphalt, cement, concrete and other essential materials You can’t build with thin air – construction needs materials and producing materials requires long-term planning and investment, so our industry needs clarity on what’s in the pipeline for the next 10 or 20 years, not the next 10 months. There is a widely recognised maxim ‘if you can’t grow it, you have to dig it.’ Clearly, this is not as recognised by government given the exemptions and subsidies some other industries enjoy. We also provide high-skill, well-paid jobs in regions most in need of economic growth.” Jackson concluded “Our overriding aim is for our sector to deliver for the UK by having economic conditions that reduce uncertainty and boost confidence to encourage investment for growth.”

Türkçimento’s Volkan Bozay took to the airwaves last week to raise the issues that the war in Ukraine is causing for Turkey-based cement producers. The head of the Turkish Cement Manufacturers’ Association explained, to the local Bloomberg HT channel, that the dramatic jump in the price of Newcastle Coal posed a serious threat to the sector. The price jumped nearly US$100/t in a single day in early March 2022. Bozay said that the cost of cement from a plant using imported coal would consequently rise by around US$15/t. He added that the association’s members had an average of 15 – 20 days of coal stocks.

Graph 1: Price of coal, March 2020 – March 2021. Source: Trading Economics.

In a separate press release Türkçimento revealed that Turkey, as a whole, imported approximately US$1.5bn of coal from Russia in 2021. The cement industry imported about 5Mt of coal in 2021, from all sources, although the majority of this came from Russia. Coal shipments from Russia since the start of the war were reported as ‘very limited or even not possible.’ It was further explained that each US$10/t increase in the price of coal put up plant production costs by US$1.5/t of cement.

Naturally Bozay’s appearance on a television news show carried a lobbying aspect. He called for government import standards – such as the sulphur ratio, lower heating values and volatile matter limits - to be relaxed to allow coal to be imported more freely from sources such as Colombia, Indonesia and South Africa. There was also a push to let in more alternative fuels such as tyres and waste-derived fuels. The bit that Bozay didn’t mention though was how many of his members had long term coal supply contracts in place to cushion them, from short term price inflation at least. Yet, if coal shipments from Russia have simply stopped, then the price is irrelevant. A cement kiln configured to run on coal stops when it uses up its stocks.

Turkey was the world’s fifth largest cement producer in 2021 according to the United States Geological Survey (USGS). Türkçimento data shows that in 2020 it exported 145,000t of cement to Russia by sea. Overall it exported 16.3Mt of cement and 13.5Mt of clinker. The US, Israel, Syria, Haiti and Libya were the top destinations for cement. Notably, Ukraine was the sixth largest recipients of cement, with 752,000t imported, although anti-dumping legislation introduced in mid-2021 looked set to reduce it until the war started. Ghana, Ivory Coast, Guinea, Cameroon and Belgium were the principal recipients of clinker. Cumulative cement exports for the year to October 2021 were up by 3% year-on-year compared to the first 10 months of 2020. Clinker exports were down by 27% though. Overall domestic production and sales in Turkey rose by 9.5%, suggested an estimated production figure of 79Mt for 2021.

Other fallout in the cement sector from the war in Ukraine this week included Ireland-based CRH’s decision to quit the Russian market. It entered the region in 1998 through a subsidiary based in Finland and was operating seven ready-mixed concrete plants via its LujaBetomix joint venture. CRH says that all operations in Russia have now stopped. In 2021 it sold its lime business in Russia, Fels Izvest, to Russia-based Bonolit. Although selling concrete plants is not trivial, these are far cheaper assets than clinker production lines. Germany-based HeidelbergCement, Italy-based Buzzi Unicem and Switzerland-based Holcim each operate at least one integrated cement plant in Russia. So far these companies have publicly expressed dismay at the humanitarian crisis unfolding in Ukraine and made donations to the Red Cross.

Graph 2: European Union Emission Trading Scheme price, 2020 – March 2022. Source: Sandbag.

Finally, one more surprise this week has been a crash in the European Union (EU) Emission Trading Scheme (ETS) carbon price from a high of Euro96/t in early February 2022 to Euro58/t on 7 March 2022. As other commentators have stated, normally the carbon price would be expected to follow the energy market, but this hasn’t happened. Instead investors have pulled out, possibly to maintain liquidity for other markets.

With the US set to ban Russian oil, gas and coal imports and phase-outs to varying degrees promised by the UK and the EU in 2022, we can expect more turbulence from energy markets in the coming days. As the Turkish example above shows, all of this can... and will... have effects on cement production.

Ghana: The Chamber of Cement Manufacturers (COCMAG) has lobbied against the government’s decision to reduce the benchmark value to 30% from 50%. It says that a reduction in discounts on selected imports will result in higher production costs that could be passed on to the price of cement, according to the Business and Financial Times newspaper. Local limestone producers are also reported to be trying to increase their prices by over 60%, which could also put up prices. COCMAG has cited growing clinker, transport and fuel input costs as a potential source of higher production costs as well as negative currency exchange effects. COCMAG wants the government to maintain the benchmark value at 50% for input materials for cement production

The benchmark system was introduced in 2019 as a way of discounting the price of certain imports. Under the policy, certain commodities were benchmarked to world prices as a risk management tool.

Spain: HeidelbergCement is starting the Neuclicem carbon capture use and storage (CCUS) project at its integrated Arrigorriaga plant near Bilbao. Local electricity company Volbas and the Tecnalia Research & Innovation centre are participating in the initiative. The project intends to look at a process based on the mineralisation of alkaline waste, such as residual construction waste or steel slag, by accelerated carbonation using CO₂ from the flue gas at the plant. The resulting materials will then be used as additives in cement production or to reduce the use of clinker. The scheme will study its viability of the process on an industrial scale.

The Neuclicem project has an estimated duration of 14 months. Its results are intended to prepare the way for scaling up to a subsequent industrial prototype. The project is partially financed by Ihobe, an environmental management division of the regional Basque government.

Trinindad & Tobago: The Caribbean Court of Justice has ruled against Hard Rock Cement in its challenge against Trinidad & Tobago’s 50% tariff on hydraulic cement. Nation News has reported that the Caribbean Community (CARICOM)’s Council for Trade and Economic Development (COTED) granted Trinidad & Tobago’s application to implement the new tariff in 2020. It remained in force for all of 2021. Cement importer Caribbean Cement challenged both the decision and the conduct of the application process.

US: The Portland Cement Association (PCA) has told the Department of Energy’s Advanced Manufacturing Office (AMO) that federal policy and support is vital to accelerate the deployment of technologies that can decarbonise the local industrial sector. In its comments to the office, the PCA said that it shares the Biden-Harris Administration’s goal of carbon neutrality by 2050 through its own Roadmap to Carbon Neutrality, which lays out a pathway to achieve this across the cement-concrete-construction value chain by 2050. However, it warned that without strong federal support the AMO’s timeline to reach carbon neutrality across industry was unrealistic due to the “significant technical, legal and economic challenges regarding technologies like carbon capture utilisation and storage (CCUS), and others including hydrogen fuel and kiln electrification.”

“Federal policy must accelerate the significant technology, funding, and market innovation needed for rapid decarbonisation while preserving economic growth and international competitiveness,” said Sean O’Neill, senior vice president of government affairs at the PCA. “The adoption of CCUS is key to achieving deep decarbonisation in the cement industry.”

The PCA added that with the right federal and state policies, CCUS could become scalable within 10 years but infrastructure, policy, permitting and funding challenges remain. It suggested that tax incentive reforms and the use of Department of Energy loan programmes could accelerate early investment and adoption of CCUS.

The use of hydrogen fuels and kiln electrification was mentioned but these technologies are seen as being at least 15 – 20 years away. The association said that hydrogen remained very expensive and there was little current infrastructure for the transport and storage of hydrogen. More research and development is required to start evaluating the efficacy of kiln electrification.

Uzbekistan: The President of Uzbekistan signed in a law change on 1 March 2022 permitting legal entities to export cement on the basis of direct contracts. The change also applies to clinker. Under the current law, all exporters can claim up to 50% of transport costs for subsidisation by the Export Promotion Agency of Uzbekistan.