
Displaying items by tag: Price
Ethiopia: Prime Minister Abiy Ahmed says that a new 7000t/day cement plant is almost ready for commissioning. New Business Ethiopia News has reported that the government hopes that the unnamed unit will be operational by June 2021. The 2.5Mt/yr Abay Cement plant at Dejen in Amhara region was previously scheduled for opening in 2021. The news comes at a time of rapid cement price rises in the country. A large black market has also arisen to serve overextended demand.
Taiheiyo Cement profits rise despite coronavirus
09 February 2021Japan: Taiheiyo Cement’s consolidated net profit in the nine-month period which ended on 31 December 2020 was US$355m, up by 22% year-on-year from US$292m in the same period in 2019. Sales fell by 2% to US$6.24bn from US$6.33bn.
The company said that domestic demand fell in the second quarter of the 2021 financial year due to the suspension of construction work during a local coronavirus lockdown. Cement sales volumes of Japanese producers were 29.6Mt, a decrease of 5% yet exports rose by 6% to 8.22Mt. Public and private sector demand remained sluggish into the third quarter of the financial year due to process delays and a shortage of construction workers. However, its cement business recorded a year-on-year price increase.
Block manufacturers warn of rising cement prices in Nigeria
08 January 2021Nigeria: The National Association of Block Moulders of Nigeria (NABMON) has warned that its members are struggling to continue their trade due to the high price of cement. The Daily Independent newspaper has attributed the price rise to post-coronavirus shutdown maintenance challenges in the cement industry, increased exports, logistical disruptions and an unseasonably high demand for cement. The association is lobbying government to put in place and enforce competition laws to help return the price to a more ‘stable’ level.
Rock Hard Cement says it will close for one month in Trinidad
05 January 2021Trinidad & Tobago: Rock Hard Cement says it will close during January 2021 in Trinidad due to alleged changes in government tariffs on imported cement. It hopes to reopen In February 2021, according to the Trinidad & Tobago Guardian newspaper. The company has published advertisements in local media warning of potential price rises of up to 80% in 2021. As well as changes to import costs the cement importer claims that the quantity of imported cement will be restricted to 75,000t/yr. The Ministry of Trade and Industry said it couldn’t comment on the matter as it is currently undergoing legal proceedings.
Pakistan: The Association of Builders and Developers (ABAD) has issued a statement warning of the dangers of recent cement price rises. The Balochistan Times newspaper has reported that the association called the rises disproportionate given the local availability of raw materials. It said that the increase would be reflected in the prices of housing units under the Naya Pakistan Housing Programme.
Prime Minister Imran Khan launched the scheme, alongside a financial support package, to revitalise the construction industry in the wake of the coronavirus outbreak.
Competition Commission of Pakistan enquiry finds evidence of collusion by All Pakistan Cement Manufacturers Association members
17 December 2020Pakistan: A Competition Commission of Pakistan (CCP) enquiry committee has recommended that the commission take action against the All Pakistan Cement Manufacturers Association (APCMA). The Frontier Star newspaper has reported that the enquiry found evidence that APCMA members had formed collusive arrangements contrary to the prohibited agreements under the Competition Act.
The Pakistan Bureau of Statistics (PBS) recorded a cement price rise in Northern Pakistan in April 2020 and May 2020, and in major cities in northern Pakistan and southern Pakistan in June 2020 and July 2020. This occurred in spite of a reduction in demand in early 2020. As a result, the CCP launched a search and inspection of the APCMA head office and the office of its senior vice chairman, a cement company director, in September 2020.
Update on Tanzania
02 December 2020Cement scalpers in Tanzania have been threatened with jail time for hoarding cement! The country faced a shortage of cement and other building materials in October 2020 and Prime Minister Kassim Majawali ordered an investigation into the issue following the conclusion of the presidential election earlier that month. Both regional commissioners and the National Prosecution Service have been dragged into the initiative. Director of Public Prosecutions Biswalo Mganga promised to local press that wrongdoers could face up to 30 years in prison for daring to hoard products or distort the market.
Rhetoric aside, the situation is curious given that HeidelbergCement’s local subsidiary, Tanzania Portland Cement, seemed to think in its 2019 annual report, that the country faced a 5Mt/yr overcapacity from integrated and grinding plants compared to a total production base of 10.6Mt/yr. However, the East African newspaper reported that despatches fell to 150,000t in October 2020 from 450,000t in September and August 2020, with a 30% surge in the price in some parts of the country.
In the wake of this, Dangote Cement apologised publicly for failing to communicate a planned stoppage at its Mtwara plant to the wider public. Tanga Cement then denied that its production was down. It said instead that production was at the highest level and that large chunks of its output was servicing government-backed infrastructure projects like the Standard Gauge Railway (SGR) and the Kigongo-Busisi Bridge, which will span the southern end of Lake Victoria. It also blamed a lack of trains on the Tanga-Moshi, which was reopened in mid-2019. It seems reasonable that cement prices might vary quite markedly, even before the profiteers got involved, due to the reasons above. Other issues locally include poor transport links, long distances in a country like Tanzania, the recent election and lingering hiccups from the blockage of imports from Kenya in 2018 that may not have helped either. The investigation continues.
A wider issue here is how much cement production capacity the country and the region can support given a propensity for spikes in prices. As Global Cement has covered previously (GCW456 and prior issues) Chinese producers have been heading into Sub-Saharan Africa over the last decade. Huaxin Cement bought ARM Cement’s assets in Tanzania in May 2020. It renamed the company African Tanzanian Maweni Limestone and then started trial production of clinker at the newly upgraded 0.75Mt/yr Maweni Limestone clinker plant in July 2020. Depending on how long ARM Cement’s former subsidiary was out of action, this one seems unlikely to rock the market too much. Tanga Cement also took the opportunity in November 2020 to say that talks with the government about a new 0.5 – 0.75Mt/yr grinding plant in Arusha were progressing
The proposed 7Mt/yr CNBM/Sinoma ‘mega’ plant is another matter entirely. Most of its output is intended for export but any disruption to local transport links, current or future, could swamp the local market. The export of Chinese infrastructure development around the world through its loan system could offer (occasionally literal) bridging solutions here as cement from a Chinese-backed factory is used to build the transport networks backed by Chinese loans that allow exports to proliferate. Tanzanian President John Magufuli’s comments that the poor terms for a US$10bn Chinese loan supporting a port project could “…only be accepted by a drunken man,” may not have helped international diplomacy. Still, Chinese money is actively getting things built here and elsewhere around the world at a rate previously unheard of.
Returning to the present, it makes a change to highlight a market where cement is truly demanded. A coronavirus-related lockdown may have slowed sales in the first half of 2020 but Dangote Cement estimated that the total market for cement in Tanzania was about 4.2Mt in the first nine months of 2020 and it reported its highest ever orders and dispatches in September 2020. That the country’s prime minister decided to discuss cement prices is a reminder of how important the commodity remains in parts of the world.
Tanzanian prime minister orders probe into cement shortage
17 November 2020Tanzania: Prime Minister Kassim Majawali has ordered regional commissioners to investigate a cement shortage that has reportedly caused a price rise. The Daily News newspaper reports that, in response to price rises first noted in October 2020, Majawali has requested a report by 20 November 2020, and questioned the part that cement producers had played in the issue. He said, “For those who use coals, we have enough to supply them. Clinker is also available at the same market price. We need an explanation behind cement price hiking."
Producers have refuted the accusation that they caused cement prices to rise.
Kilns break down at Akhangarancement and Almalyk Mining and Metallurgical Combine cement plants
21 October 2020Uzbekistan: Cement sales volumes has decreased by 29% to 5000t/day from 7000t/day at the Akhangarancement cement plant in Toshkent and by 55% to 5000t/day from 11,000t/day at the Almalyk Mining and Metallurgical Combine cement plant in Jizzakh. Uzbekistan Newsline has reported the cause of the decline as the breakdown of two kilns at the plants. This has led to a decrease in domestic cement production to 37,000t/day and sales to 35,000t/day, resulting in a slight price increase. Prices had previously been falling due to the effects of the post-coronavirus lockdown economic recovery.
Ethiopian government offers licences for 16Mt of cement imports in 2021 financial year
14 September 2020Ethiopia: The Ministry of Trade and Industry says that it is granting licences for the import of 16Mt over the financial year ending 7 July 2021, the 2021 financial year. The Ethiopian Press Agency has reported that the cause of the measure is a cement shortage resulting in inflated prices. The order requires importers to import a minimum of 3000t of cement, and to begin importing before 8 December 2020.
Director of communication affairs Wondimu Flate said, “The directive was prepared in order to enable cement factories to produce at their full potential and to connect those engaged in the sector from the manufacturer and importer to the retail business, with supply and distribution being monitored and used.”