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Spain: Cement consumption has increased by 11.5% year-on-year in April 2024, reaching 1.3Mt, which is 136,000t more than April 2023, according to the latest statistics published by the Cement Manufacturers Association (Oficemen).

For the first four months of 2024, cement consumption amounted to 4.65Mt, marking a year-on-year decline of 4.5% compared to the same period in 2023. This represents a loss of 218,000t. Over the last 12 months (May 2023 - April 2024), cement consumption also fell by 4.5%, with total consumption standing at 14.3Mt, 672,700t less than the previous period.

Exports fell nearly 24% in April, amounting to 387,500t. For the year to date, from January to April 2024, exports have reached 1.45Mt, a decrease of 25.3% compared to the same period in 2023. Over the last 12 months, exports have dropped below 5Mt, nearly 1Mt less than the previous year.

Oficemen's general manager, Aniceto Zaragoza, said "This is the first positive month after ten months of decline. However, this percentage growth was influenced by the calendar effect, as this April had more working days due to Easter being in March, not April as last year. In fact, the average daily consumption figures, which are more sensitive to the number of working days, show a decline of 8.8%."

Before Russia invaded mainland Ukraine on 24 February 2023, many predicted that full-scale conflict would be averted. When the attack began, Russian President Vladimir Putin himself expected a 10-day war, according to think tank RUSI. 15 May 2024 marks two years, two months and three weeks of fighting, with no end in sight.

Ukrcement, the Ukrainian cement association, recently published its cement market data for 2023, the first full year of the war. The data showed domestic cement consumption of 5.4Mt, up by 17% year-on-year from 4.6Mt in 2022, but down by 49% from pre-war levels of 10.6Mt in 2021. In 2023, Ukraine’s 14.8Mt/yr production capacity was 2.7 times greater than its consumption, compared to 1.4 times in 2021. Of Ukraine’s nine cement plants, one (the 1.8Mt/yr Amwrossijiwka plant in Donetsk Oblast) now lies behind Russian lines. Four others sit within 300km of the front line in Eastern and Southern Ukraine. Among these, the 4.4Mt/yr Balakliia plant in Kharkiv Oblast, the largest in the country, first fell to the Russians, but was subsequently liberated in September 2022.

Before the war, Ukrcement’s members held a 95% share in the local cement market. Their only competitors were Turkish cement exporters across the Black Sea, after the Ukrainian Interdepartmental Commission on International Trade successfully implemented anti-dumping duties against cement from Moldova and now-sanctioned Belarus and Russia in 2019. Since then, Turkish cement has also become subject to tariffs of 33 – 51% upon entry into Ukraine, until September 2026. The relative shortfall in consumption has led Ukraine’s cement producers to lean on their own export markets. They increased their exports by 33% year-on-year to 1.24Mt in 2023, 330,000t (27%) of it to neighbouring Poland.

Russia’s invasion has made 3.5m Ukrainians homeless and put the homes of 2.4m more in need of repair. In a report published in Ukrainian, the US Agency for International Development (USAID) set out its three-year rebuilding plan for the country. USAID projects an investment cost of €451bn, with the ‘main task’ besides homebuilding being to increase the share of industrial production in the economy. Ukraine is 90% equipped to produce all building materials required under the plan. Their production, in turn, will create or maintain 100,000 jobs and US$6.5bn in tax revenues. Reconstruction will also involve the Ukrainian cement industry returning to close to full capacity utilisation, producing 15 – 16Mt/yr of cement.

CRH, an established local player of 25 years, looks best set to claim a share of the proceeds. Stepping down an order of magnitude from billions to millions, Global Cement recently reported CRH’s total investments in Ukraine to date as €465m. Since war broke out, the company has more than tripled its rate of investment, to €74.5m. The Ireland-based group is in the protracted administrative process of acquiring the Ukrainian business of Italy-based Buzzi. If successful, the deal will raise its Ukrainian capacity by 56%, to 8.4Mt/yr – 57% of national capacity. This unusual clumping of ownership may be made possible by the participation of European Bank for Reconstruction and Development in partly acquiring the assets, as per a mandate letter signed with CRH in 2023.

Leading Ukrainian cement buyer Kovalska Industrial-Construction Group bemoaned the anticipated increase in market concentration. On the one hand, this sounds like a classic tiff between cement producers and users with shallow pockets. On the other hand, an antebellum allegation of cement industry cartelisation should give us pause for thought. Non-governmental organisation The Antitrust League previously reported Ukraine’s four cement producers to the government’s Anti-Monopoly Committee for alleged anticompetitive behavior. This was in September 2021, when Ukraine was barely out of lockdown, let alone up in arms. With all that has happened since, it may seem almost ancient history, yet the players are the same, CRH and Buzzi among them.

Ukrcement and its members have secured favourable protections from the Trade Commission, and, for whatever reasons, evaded the inconvenience of investigation by the Anti-Monopoly Committee – a state of affairs over which the Antitrust League called the committee ‘very weak.’ The league says that producers previously raised prices by 35 – 50% in the three years up to 2021. In planning a fair and equitable reconstruction, Ukrainians might reasonably seek assurance that this will not happen again.

All these discussions are subject to a time-based uncertainty: the end of the war in Ukraine. A second question is where the finances might come from. The EU approved funding for €17bn in grants and €33bn in loans for Ukraine on 14 May 2024. Meanwhile, countries including the UK have enacted legislation to ensure Russia settles the cost of the conflict at war’s end. If Ukraine achieves its military aims, then the finances may flow from the same direction as did the armaments that demolished Ukrainian infrastructure in the first place.

The first piece of Ukraine annexed by Russia was Crimea in February 2014, making the invasion over a decade old. Against such a weight of tragedy, the country cannot lose sight of the coming restoration work, and of the need to ensure that it best serve Ukrainians.

Vietnam: Cement production in Vietnam has fallen by 0.7% year-on-year in the first four months of 2024, reaching 57.6Mt, according to the latest data from the government’s General Statistics Office. In April 2024, the country’s cement output was 16.8Mt, a year-on-year decline of 0.7%.

In 2023, the country produced 120.1Mt of cement, representing a year-on-year decrease of 4.5% from the previous year.

Thailand: Siam Cement Group (SCG) reported first-quarter sales of US$3.36bn in 2024, down by 3% year-on-year. The group partly attributed this to a decline in its cement volumes. Nonetheless, group earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 4% to US$341m. Special items in the group’s first-quarter 2023 results precipitated an 85% year-on-year decline in net income to US$65.5m from US$446m.

SCG recorded first-quarter CO₂ emissions of 5.99Mt, outstripping the Science-Based Targets Initiative (SBTi)’s recommendation of a 2.5% annual reduction. It relied on 47% renewable energy sources in its cement production.

Changes are underway in South Asia’s second largest cement sector, with two legal developments that affect the industry set in motion in the past week. At a national level, the Competition Commission of Pakistan recommended that the government require cement producers to include production and expiry dates on the labels of bagged cement. Meanwhile, in Pakistan’s largest province, Punjab, a new law tightened procedures around the establishment and expansion of cement plants. At the same time, the country’s cement producers began to publish their financial results for the first nine months of the 2024 financial year (FY2024).

During the nine-month period up to 31 March 2024, the Pakistani cement industry sold 34.5Mt of cement, up by 3% year-on-year. Producers have responded to the growth with capacity expansions, including the launch of the new 1.3Mt/yr Line 3 of Attock Cement’s Hub cement plant in Balochistan on 17 April 2023. China-based contractor Hefei Cement Research & Design executed the project, including installation of a Loesche LM 56.3+3 CS vertical roller mill, giving the Hub plant a new, expanded capacity of 3Mt/yr.

Pressure has eased on the operating costs of Pakistani cement production, as inflation slowed and the country received a new government in March 2024, following political unrest in 2022 and 2023. Coal prices also settled back to 2019 levels, after prolonged agitation. Pakistan Today News reported the value of future coal supply contracts as US$93/t for June 2024, down by 2% over six months from US$95/t for January 2024.

Nonetheless, cost optimisation remained a ‘strong focus’ in the growth strategy of Fauji Cement, which switched to using local and Afghan coal at its plants during the past nine months. Its reliance on captive power rose to 60% of consumption, thanks to its commissioning of new waste heat recovery and solar power capacity. During the first nine months of FY2024, the company’s year-on-year sales growth of 14% narrowly offset cost growth of 13%, leaving it with net profit growth of 1%.

Looking more closely, the latest sales data from the All Pakistan Cement Manufacturers Association (APCMA) shows a stark divergence within cement producers’ markets. While exports recorded 68% year-on-year growth to 5.1Mt, domestic sales fell, by 4% to 29.4Mt. The association further breaks down Pakistani cement sales data into South Pakistan (Balochistan and Sindh) and North Pakistan (all other regions). Domestic sales dropped most sharply in South Pakistan, by 6% to 5.16Mt. In the North, they dropped by 3% to 24.2Mt. Part of the reason was a high base of comparison, following flooding-related reconstruction work nationally during the 2023 financial year. Meanwhile, the government finished rolling out track-and-trace on all cement despatches during the opening months of the current financial year, and commenced the implementation of axle load requirements for cement trucks. APCMA flagged both policies as potentially disruptive to its members’ domestic deliveries, amid a strong infrastructure project pipeline.

Pakistani producers suffer from overcapacity, but have established themselves as an important force in the global export market. They continue to locate new markets, including the UK in January 2024. Lucky Cement was among leading exporters overall, with a large share of its orders originating from Africa.

On 17 April 2024, the government of Punjab province set up a committee to assess new proposed cement projects, with the ultimate goal of conserving water. Falling water tables are considered a significant economic threat in agricultural Punjab. Besides completing an inspection by the new committee, proposed projects must also secure clearance from six different provincial government departments and the local government. While acknowledging the necessity of the cement industry, the government insisted that it will take legal action against any cement plant that exceeds water allowances.

Pakistan’s cement plants have grown in anticipation of a local market boom. Without this strong core of sales, underutilisation will remain troublesome, especially in North Pakistan where exposure is highest. At the same time, APCMA has given expression to the perceived lack of support affecting production and distribution. For an industry with expansionist aims, new restrictions on its growth and operations can feel like an existential menace.

Spain: Cement consumption has dropped by 10% in the first quarter of 2024, totalling 3.3Mt. This represents an 11% year-on-year decrease compared to the same quarter of 2023, according to the latest data released by Oficemen. The 2024 quarterly decline was influenced by a 23.6% fall in consumption in March 2024 to 1.1Mt, 339,869t less than March 2023. Over the last 12 months (April 2023 - March 2024), consumption fell by 6.4% to 14.1Mt, nearly 1Mt less than in the previous corresponding period of April 2022 – March 2023.

Oficemen general director Aniceto Zaragoza said "Aside from the situational circumstances of March 2024, the year-moving data reflect a negative trend, resulting from 10 months of decline. This is concerning but in line with our forecasts that anticipated a negative start to the year, with a modest recovery in the second half, provided that the international and local situation remains stable.”

Cement exports have declined by 25.1% in the first quarter of 2024, standing at around 1Mt. In March 2024, the decline was 32.4%, with a loss of 178,953t, marking nine months of consecutive declines. Over the year-moving period, the fall is 14%, with a total of 4.8Mt of cement exported. representing a loss of almost 800,000t less than in the previous 12 months.

Ukraine: Data from Ukrcement, the Ukrainian Cement Association, show that cement consumption grew by 17% from 4.6Mt in 2022 to 5.4Mt in 2023. Pavlo Kachur, the head of Ukrcement, said that consumption is expected to continue growing modestly in 2024, according to Interfax-Ukraine. He added that the country exported 1.24Mt of cement in 2023.

Before Russia invaded the country in 2022 it reported consumption of 10.5Mt in 2021. It has a production capacity of 13.6Mt/yr. Despite the ongoing war the local cement sector says it is considering plans to meet future market demand such as repairing plants in Balakliya and Kramatorsk and even, potentially, building new production lines.

China:  The UK-based Carbon Disclosure Project Carbon Majors database has released its Carbon Majors Database. The database quantifies the historical CO₂ emissions of 122 of the world's major emitters, among them the Chinese cement sector.

Notably, China's cement industry has been a significant contributor to global emissions. In the period up to the end of 2022, China's cement sector has produced 23,161Mt of CO₂, accounting for 1.3% of the global emissions recorded during this period. From 2016 to 2022, the cement industry in China emitted 8.16Bnt of CO₂, accounting for 3.2% of global emissions.

Figures for the cement sector include process emissions from the calcination of limestone, but exclude emissions from fuel and electricity used in production.

World: Investment firm Insight Partners has forecast a composite annual growth rate (CAGR) of 3.3% in the global green cement and concrete market between 2023 and 2030. This will result in a total value of US$990m in 2030, compared to US$806m in 2023. Regionally, the firm expects the sharpest growth in South and Central America, with a CAGR of 10% to US$7.9m in 2030. North America is expected to grow at a rate of 5.4% annually, to US$190m, followed by Europe, at 4.5% to US$226m, Middle East and Africa, at 2.9% to US$13m, and Asia-Pacific, at 1.4% to US$553m. In 2023, Asia-Pacific commanded a 61% share of the global market. Europe’s share was 20% and that of North America was 16%.

Peru: UNACEM reported sales of US$1.69bn in 2023, up by 6.6% year-on-year, despite a ‘significant downturn’ in the construction market. Its net profit dropped by 22% to US$139m.

Business News Americas has reported that the Peruvian Cement Producers’ Association (ASOCEM) recorded 9% month-on-month growth in domestic cement consumption in January 2024. Scotiabank forecasts 5% year-on-year growth in consumption in the first quarter of 2024, and a 3.7% expansion in the construction market in the full year 2024, following an 8% contraction in full-year 2023.