Displaying items by tag: Shortage

Georgia: HeidelbergCement Georgia plans to invest in additional grinding capacity at both of its cement plants. The subsidiary of Germany-based HeidelbergCement says that it will complete expansion work at both plants by the 2022 production season. It is also contemplating the possibility of clinker capacity expansions.

In early July 2021, Georgia experienced a cement shortage due to the release of pent-up demand from infrastructure projects and reduced imports from Turkey and Azerbaijan.

Iran: Cement and steel producers have been ordered to stop production for up to three weeks due to insufficient electricity supplies. A spokesman for the electricity industry said that the cut in supply was now necessary after heavy industrial customers had failed to observer a voluntary request, according to the Fars News Agency. Electricity supplies will be reduced to 10% of normal levels during the period.

Grenada: The Caribbean Community (CARICOM) Council for Trade and Economic Development has received an application from Grenada for the legalisation of imports of cement from outside of the CARICOM bloc into the country. Nation News has reported that the country is experiencing a cement shortage because Trinidad & Tobago-based Trinidad Cement has suspended exports. The producer reduced its activities because of the on-going Covid-19 outbreak.

Grenada previously sought to import cement from non-CARICOM member countries in 2004 following Hurricane Ivan.

US: The Boston Globe newspaper has reported that the single biggest threat to the US government’s planned industrial reinvigoration based around a US$2.2tn federal infrastructure spending plan is a shortage of resources. The newspaper named a lack of workers and cement mills as particular concerns. It reported that the National Association of Home Builders has called for tariffs to be cut for certain key building materials such as lumber and that more cement should be imported.

Cuba: Cementos Cienfuegos’ Carlos Marx cement plant in Guabairo resumed production in late May 2021. Production had been suspended since 14 January 2021 due to a lack of petcoke, according to the Sierra Maestra newspaper. Fuel suppliers had been affected by a fuel shortage created by US trade sanctions. Despite the enforced shutdown the plant intends to meet its production target for 2021.

UK: Hanson, part of Germany-based HeidelbergCement, has reduced its bagged cement allocations to customers. The Construction Index has reported that the decision is due to a national shortage of cement in the UK. The building materials producer introduced a packed cement allocation in May 2021. It calculated these by the proportion of orders that it believed could fulfil. Packed products director Andrew Simpson said, “Regrettably, we have been unable to maintain those levels.” He added that the company had had to perform unforeseen work on its cement operations following its 2021 shutdown.

Supply issues for packaging materials have also been reported. Bag suppliers informed Hanson to expect longer-term packaging shortages due to global demand for polymer and kraft paper, according to Simpson. He added that low pallet availability was also a concern.

The UK construction market is in a funny situation right now. As the economy has started to grow in 2021, shortages of building materials have been reported following the relaxation of coronavirus-related restrictions. In April 2021, for example, the Construction Leadership Council (CLC) added cement, aggregates and certain plastics to its existing lists of products in short supply. These commodities joined a slew of other materials, including timber, steel, roof tiles, bricks and imported products such as screws, fixings, plumbing items, sanitaryware, shower enclosures, electrical products and appliances. The CLC advised all users to, “plan for increased demand and longer delays, keep open lines of communication with their suppliers and order early for future projects.”

Skip forward a month to May 2021 and these shortages are on more people’s minds with the announcement by the Office for National Statistics that UK monthly construction output grew by 5.8% month-on-month to around Euro16.5bn in March 2021 due to both new work and to repair and maintenance projects. Quarter-on-quarter output also rose by 2.6%, adding to the impression of a building sector emerging from the fog of lockdown. In the face of this good news Nigel Jackson, the chief executive of the UK mineral Products Association (MPA), was asked about reported shortages of cement. He told local press this week that “it would not be surprising if there were short-term issues of supply as the economy gathers momentum.” He added that the biggest issues had been observed in levels of bagged cement typically used in domestic projects.

The MPA followed this up with the results of a survey of building materials manufacturers that reported a slow but steady start to 2021 with mounting construction demand month-on-month. Sales volumes of aggregates and concrete were both up quarter-on-quarter but volumes of asphalt and mortar fell. Unfortunately that survey didn’t cover cement volumes but it did have more to say about concrete. In its view ready-mixed concrete sales had been subdued since 2017 due to the UK’s departure from the European Union (Brexit) and a general slowdown in residential building. The market recovery seen so far in 2021 was likely to be merely a return to growth from a subdued level of activity that pre-dates Covid-19.

At the time of writing the UK government faces a decision about whether to continue opening up the economy or exercise caution in the face of the as-yet unknown consequences of the Indian variant of coronavirus. This may delay talk of building materials shortages but it can’t avoid it forever. In the UK, cement shortages appear to be due to the self-build segment and will hopefully soon be resolved.

A shortage of cement in the UK may not mean much to people outside the country, with the exception of exporters. Yet the wider picture here is that the coronavirus pandemic has affected the production of building materials, changed end-user behaviour and distorted markets around the world. Other examples include the row over the price of cement in Nigeria, the boom in cement sales in Brazil in the second half of 2020 or reported shortages in Jamaica this week. A significant number of people, when forced to spend more time at home, appeared to save money and then decided to either move to a different house or make their current one better. Yet at the same time differing government restrictions and market fluctuations have seen building material output levels vary widely. Other reasons are at play both local and international. Brexit in the UK is one example of the former, as importers and exporters have been forced to grapple with new rules and costs. The temporary blockage of the Suez Canal in March 2021 is one example of the latter. No wonder supply chains are struggling. That last point goes wider than building materials though, for example, as anyone trying to buy semiconductors has discovered. One fear behind all of this though is whether these are temporary shortages or whether inflation is on the way for the global economy generally. In this is the case, then it signals the end of the low consumer inflation rate era since the financial crash in 2008 and may herald changes in behaviour from both producers and consumers.

Jamaica: Builders have complained about a shortage of cement with mounting delays between ordering the product and receiving it. However, Caribbean Cement has denied that there is any disruption to supply, according to the Jamaica Observer newspaper. However, the producer did note that there is currently an ‘extraordinary’ demand for cement due to a boom in the construction sector. It is currently increasing production to meet the surge.
Caribbean Cement says it produced over 0.1Mt of cement in March 2021, a record in recent monthly production. In 2020 it produced over 0.94Mt.

Nigeria: Dangote Cement says that work is underway to increase its total cement production capacity in Nigeria by 4.5Mt/yr before September 2021. The Guardian newspaper has reported that plans consist of new lines at the company’s cement plants in Obajana, Kogi state, and Okpella, Edo state, and the restart of production at its plant at Gboko, Benue state. Sales and marketing director Rabiu Umar said that the reason behind the decision was a surge in demand leading to a ‘sold-out’ situation in the country. He added that the firm has also ceased its export programmes in order to better serve the needs of domestic consumption.

UK: The Mineral Products Association (MPA) has warned of the likelihood of a short-term shortage of cement. It identified the cause of a probable shortage as the rise in construction leading to record cement demand. Bagged cement, of which the industry delivers 12.0Mt/yr, is most at risk of running out. The Daily Telegraph newspaper has reported that domestic projects are rising most sharply due to the deployment of the Euro232bn of costs saved during coronavirus lockdowns, and the recommencement of suspended projects from the same periods.

MPA chief executive officer Nigel Jackson said “We appear to be coming out of this period of Covid-19 lockdowns; the roadmap is on course; people's confidence and optimism is growing. A lot of people have been confined to their homes and taken the decision to invest in improving because they're not moving.”