Displaying items by tag: Production
Cement sales and production continue to fall in Puerto Rico
22 December 2016Puerto Rico: Cement production has fallen by 30% year-on-year to 756,000 bags in the first eleven months of 2016 from 1.08M bags in the same period in 2015. Cement sales fell by 13% in the same period, a faster rate of decline than 8.5% in 2015 and 9.8% in 2014, according to local press. The decline has been attributed to a lack of funding supporting infrastructure projects and a slowdown in the residential construction sector.
Sibirsky Cement’s production falls by 19% to 3.1Mt in 2016
21 December 2016Russia: Sibirsky Cement’s production has fallen by 19% year-on-year to 3.1Mt/yr in 2016. It has blamed the fall on a reduction of market demand in the Siberian Federal District. Cement consumption in the region is expected to fall by 14% in 2016.
US clinker production stagnates in third quarter of 2016
25 November 2016US: Clinker production has fallen slightly to 20.5Mt in the third quarter of 2016 from 20.6Mt in the same period of 2015 according to preliminary data released by the United States Geological Survey (USGS). Portland and blended cement shipments fell by 3.7% to 26.4Mt from 27.4Mt. However, for the first nine months of the year both clinker production and cement shipments have risen. A full report for September 2016 will be published by the USGS in early December 2016.
Cement consumption in Russia falls by 10.9% so far in 2016
22 November 2016Russia: Cement consumption has fallen by 10.9% year-on-year to 44.3Mt in the first nine months of 2016 from 49.8Mt in the same period in 2015. The biggest decreases occurred on the Central, Volga, Siberian and North-Western federal districts, according to data from the Russian Cement Association (CMPRO) and the Russian Construction journal. Cement production has fallen by 10.9% to 43.5Mt from 48.9Mt. The falls in consumption and production have been blamed on a poor construction market although the residential sector picked up slightly in the third quarter of 2016.
Japan relies on cement exports
02 November 2016Two of Japan's largest cement producers have reported reduced domestic cement sales in the country this week. First, Taiheiyo Cement revised its forecast for its 2017 financial year, ending on 31 March 2017, bringing its estimated net sales down by 2.3%. Then, Ube Group reported that its cement sales had fallen by 7.2% year-on-year to US$1.05bn in the first half of its financial year. Both producers blamed poor weak demand locally, but Ube also cited a poor export market.
Graph 1: Domestic and export cement sales in Japan, 2006 - 2015. Source: Japanese Cement Association.
This last point is interesting because it differs from the latest data released by the Japanese Cement Association (JCA). As can be seen in Graph 1 JCA figures show that exports of cement have been rising since 2013. So far this trend looks likely to continue in 2016. Ube's different experience may arise from its market mix and its distribution of cement plants and transport infrastructure. Both of its cement plants are based in the south of the country. Commentators have attributed the boost in exports to the devaluation of the Yen in 2015 as well as strong brand perception overseas. Unfortunately, this overall rise in exports has been matched by a fall in domestic sales at the same time and this is causing a headache for the major producers. Production too has started to drop since 2014 (Graph 2).
Graph 2: Cement production in Japan, 2006 - 2015. Source: Japanese Cement Association.
Japan's cement market is dominated by four producers - Taiheiyo Group, Mitsubishi Materials, Ube Industries and Sumitomo Osaka Cement - which hold nearly three quarters of the nation's production capacity between them. According to Global Cement Directory 2016 data, Taiheiyo Cement and its subsidiaries is the market leader with over 30% market share with the other three holding 10 - 20% each.
Graph 3: Cement production capacity share in Japan (Mt). Source: Global Cement Directory 2016.
Taiheiyo's downgraded forecast follows poor first quarter results, in which its net sales for its cement business fell by 16% to US$1.19bn. This follows a slight rise in net sales for its cement business in its 2016 financial year due to a boost in sales from its overseas subsidiaries, particularly in the US, that surpass a fall in domestic sales. Sales volumes were 14.7Mt domestically and 4Mt in exports in 2016. Mitsubishi Materials has posted a similar picture with cement sales and profits rising in 2016 before suffering in the first quarter of 2017. Mitsubishi Materials blamed the poor market on a delay in construction work mainly due to labour shortages and sluggish growth in demand from the public sector. Ditto Sumitomo Osaka Cement.
As highlighted by such decision as Tokyo Cement's move to resume exporting clinker to Sri Lanka in early 2015, Japan's cement industry is working hard to compensate for falling demand at home. Increasing exports in Asia Pacific among other massive exporters such as China, Vietnam and South Korea is impressive, although the prominent foothold by Japanese companies in the recovering US market may offer some advantage here. On-going weak demand in China though cuts out one major market for Chinese exporters. However, being a major exporter in a region of major cement producers must be a concern. Although commentators such as Ad Ligthart dismiss the chances of China flooding the world with cheap cement, if they are wrong and Japan continues its reliance on exports it may find itself in deep water. The other risk is if the US authorities decide to get tougher on foreign exports it may knock out one more market for Japanese exports. Too much reliance on exports is always dangerous. In this context, it’s no surprise that Japanese cement producers are blaming the government for insufficient infrastructure spending.
Chinese cement production picks up in 2016
31 October 2016China: Cement output grew by 2.6% year-on-year to 1.77Bnt in the first nine months of 2016, according to data from the National Development and Reform Commission (NDRC). This is compared to a 4.7% drop in output that was noted for the same period in 2015 compared to 2014. Figures from the National Bureau of Statistics (NBS) show that property sector investment rose by 5.8% year-on-year in the first nine months of 2016, a faster rate than earlier in the year, supported by interest rate cuts and lower deposits.
Uzbekistan: Ahangarancement has increased its cement production by 6% year-on-year to 1.42Mt in the first nine months of 2016. Clinker production grew by 3.8% to 1.02Mt and cement sales volumes grew by 6.1% to 1.42Mt, according to the Trend News Agency. Ahangarancement, based at Ahagaran in Tashkent, is the second largest cement producer in the country. It is owned outright by Russia’s Eurocement.
Malabar Cements to resume operations this month
07 October 2016India: Malabar Cements will restart operations later in October 2016, says EP Jayarajan, the Industry Minister of Kerala. The publicly owned cement producer stopped production due to lack of supply of raw materials in late September 2016, according to the Hindu newspaper. Laterite and limestone required for production will be sourced from Kasaragod and Rajasthan respectively.
Sino Zimbabwe Cement may cut shifts in response to poor demand
09 September 2016Zimbabwe: Sino Zimbabwe Cement Company may cut shifts in response to poor local demand for cement. Managing director Wang Yong told the Business Chronicle that local demand for cement has fallen by 25% due to a poor construction market. The cement producer is considering reducing its current pattern of three shifts to just one day shift.
Despite market concerns, the company has spent US$1m towards building storage space for raw materials and transport infrastructure improvements. In 2015 it completed a US$5m upgrade to double its production capacity to 0.4Mt/yr.
Secil Lobito struggling to import raw materials
05 August 2016Angola: Augusto Miragaia, the director of Secil Lobito, has said that he expects his company’s sales volumes of cement to drop by 25% year-on-year to 150,000 in 2016. He attributed the fall in sales to difficulties in obtaining foreign currencies to import raw material, according to the O País newspaper.
The company, which operates a cement grinding plant in Lobito, is unable to import sufficient clinker, other raw materials or hire skilled workers. It also faces mounting fuel and electricity costs. During the past three months the plant has used clinker purchased from the Cuanza Sul Cement plant but this source stopped supplying it in late June 2016.
Angola has five cement plants and an installed capacity of about 8Mt/yr. Demand exceeded production capacity by 2.7Mt/yr in 2015. The Lobito cement plant is majority owned by Secil-Angola. The remaining 49% stake is held by Angola’s state-run company Empresa Nacional de Cimentos.