Displaying items by tag: inventory

Jamaica: Caribbean Cement Company Limited (CCCL) says it continues to focus on improving its cement inventories and deliveries to the local market, amid disruption in September and early October 2024.

The company stated that further measures have been implemented to enhance inventory deliveries to its island-wide depots. It stated that it was currently operating at full production capacity and had successfully addressed various operational challenges, including those caused by adverse weather conditions relating to Hurricane Milton, which recently affected the region.

“Our valued customers and the public can expect further improvements in cement delivery over the coming week,” said the company. “CCCL remains committed to better serving its customers and enhancing services to ensure a reliable local supply of products.” The company added that it sincerely appreciated the ‘patience and understanding’ of all of its customers.

Jamaica: Caribbean Cement Company (CCC) is addressing concerns that have arisen due to a shortage of cement in the market, which has reportedly led to hardware stores rationing supplies, according to the Jamaica Observer. The government has been called on to address the problem, reportedly affecting more than 150,000 people employed in the construction industry.

A spokesperson for CCC said “Caribbean Cement Company has successfully completed the scheduled annual maintenance of its kiln, and we are aware that some customers are experiencing delays in obtaining cement. Prior to the maintenance, the company held sufficient inventories to meet market needs. However, the passage of Hurricane Beryl and the company’s subsequent response to ongoing relief efforts resulted in faster consumption of these initial inventories. We recognise the importance of our operations to the construction industry and are working diligently to replenish inventories as quickly as possible for our valued customers. We anticipate a return to normal inventory levels during the coming days.”

US: Eagle Materials’ consolidated sales were US$1.68bn during the first nine months of its 2023 financial year, up by 16% year-on-year from US$1.45bn in the corresponding period of the 2022 financial year. Its net earnings were US$361m, up by 20% year-on-year from US$300m.

In its cement business, the group noted a drop in volumes and a rise in prices year-on-year during the third quarter of the 2023 financial year. Low inventory levels and ‘difficult weather’ reportedly impacted on demand. The group’s cement volumes fell by 13% year-on-year to 1.7Mt. This resulted in a 2% drop in the cement business’ revenues, to US$256m.

South Korea: Truck drivers went on strike across South Korea on 24 November 2022. Reuters News has reported that the drivers demand that a government pay scheme be made permanent and extended to drivers in all sectors. A previous eight-day strike in June 2022 cost the South Korean cement industry US$79.8m. The Korean Cement Association said that most customers do not have cement in inventory beyond three days' supply, and will begin to run out from 27 November 2022.

India: Gujarat Sidhee Cement has stopped its kiln for a temporary period of 15 – 20 days due to high clinker inventory levels. Cement grinding and despatch will continue unabated. The cement producer operates an integrated plant at Sidheegram in Gujarat.

China Daily ran a story this week entitled “Steel and cement don't reflect China's growth story any more.” The piece reassured English-language readers that the country’s economy is moving on and that recent falling production of cement simply reflected the “profound changes China's economic structure is undergoing.” Profound is the right word here given that China is home to the world’s largest cement sector.

Graph 1: Cement output by quarter in China, 2019 - 2022. Source: National Bureau of Statistics of China.

Data from the Ministry of Industry and Information Technology shows that cement output fell by 12% year-on-year to 387Mt in the first quarter of 2022. This compares to 7% and 15% falls in the third and fourth quarters of 2021 respectively. On an annual cumulative rolling basis, output previously hit a low of 2.22Bnt in March 2020 as the initial coronavirus outbreak was brought under control. Output then surged to a high of 2.53Bnt/yr in April 2021 before it started to fall in the autumn of 2021. On a monthly basis, output volumes fell by 5.6% year-on-year to 187Mt in March 2022.

As covered in last week’s column (GCW 555), the financial results from the larger Chinese cement producers have also suffered in the first quarter of 2022. CNBM’s total operating revenue fell by 1% year-on-year to US$7.29bn in the first quarter of 2022. Anhui Conch’s revenue fell by 26% to US$3.85bn and China Resources Cement’s (CRC) turnover fell by 18% to US$889m. Of these three only CRC has released cement sales volumes. Its sales volumes of cement and clinker decreased by 34% and 12% respectively.

In its own analysis, the China Cement Association (CCA) has summarised the current situation as one of rising costs, falling demand and declining benefits. The latest large-scale coronavirus lockdowns and a poor real estate market have hit demand. Rising energy and freight prices have increased the cost of cement. Together, higher costs and falling demand have hit the profits of the cement producers. CNBM’s net profit, for example, fell by 9% to US$420m. Regionally, the CCA observed that the losses of the northern-based producers had increased and that the profits of the southern producers had started to fall sharply also. Another interesting point it made was that the year-on-year decline in March 2022 was slower than compared to the first quarter as a whole and that high levels of inventory may have made March 2022 look worse than it actually was. The association is now pinning its hopes upon demand and prices picking up again later in the second quarter after the current quarantine controls are eased and the government curbs high coal prices.

The CCA’s take doesn’t seem unreasonable, although the first quarter of 2022 was previously deemed to be a continuation of the trouble the Chinese cement sector experienced in the autumn of 2021. Possibly the first quarter has turned out worse than expected but the monthly output in March 2022 has started to look like it might be a tail-off from the worst. The period to watch remains the second quarter of 2022. Looking more widely, energy shocks from the war in Ukraine couldn’t be easily predicted but coal prices were already becoming a concern in the autumn of 2021. China’s renewed zero-Covid policy meanwhile is starting to look unpalatable both economically and socially. Throw in a continued slowdown of the real estate sector and China Daily’s profound pronouncement about the future of cement may prove accurate.

Thailand: Siam Cement Group (SCG) says that a fire at its integrated Kaeng Khoi plant in Saraburi may affect exports on a temporary basis. The cement producer reported a fire at the site on 29 October 2021. The incident took place in part of a cable tunnel near to the control room at the plant. No injuries to staff were noted and the situation was stabilised quickly. The company said that the fire will not affect domestic cement sales as it has sufficient inventory.

Vietnam: Vietnam National Cement Association (VNCA) members sold 77.5Mt of cement in the first nine months of 2021, up by 3.5% year-on-year. Vietnamese cement exports rose by 19% over the same period, to 31.9Mt. This corresponds to 41% of total sales. State-owned Vietnam Cement Industry Corporation (VICEM) exported 14.5Mt of cement, 45% of national cement exports. Viet Nam News has reported that the country ended the nine-month period with 3.6Mt of cement and clinker in inventory.

Saudi Arabia: Domestic cement sales in November 2020 were 4.8Mt, up by 17% year-on-year from November 2019. Mubasher News has reported that Saudi cement exports fell by 6% to 179,000t from 192,000t. Clinker exports rose by 85% to 490,000t. The national clinker inventory fell for a seventh consecutive month, to 38Mt.

In November 2020 Saudi Arabia produced 5.0Mt of cement and 4.3Mt of clinker.

Vietnam: Cement producers sold 45.7Mt of cement and clinker in the first half of 2020, down by 3% year-on-year from 47.1Mt in the first half of 2019. Exports grew by 1% to 15.6Mt from 15.4Mt. The Vietnamese National Cement Association (VNCA) says that producers retain a total of 0.8Mt of cement and 4.2Mt of clinker in inventory.