Latest industry data for full-year 2010 show that demand in the mature market of Spain is still struggling to show signs of an improvement, but favorable trends continue in the emerging markets of Brazil and Argentina.
Figures released by Oficemen, the Spanish cement manufacturers’ association, show that the local market closed 2010 with a total consumption of 24.5Mt, representing a 15% decline on 2009 (28.9Mt). Cement production last year was down by almost 12% to 26Mt and clinker manufacture fell by 3% to 21Mt. Exports, however, rose 33% as producers endeavoured to obtain the maximum return from their assets. Imports were nearly 2Mt, down 31% compared to 2009.
Spanish demand has been tumbling from highs of 56Mt, posted in 2007. This amount was almost halved within two years, largely due to an unsustainable boom in housebuilding activity and falls in commercial and industrial building work. While cement demand is forecast to continue its descent in 2011, the pace is likely to be at a reduced rate. Compared to 2008 and 2009, consumption was down 23.8% and 32.9%, respectively. Oficemen has forecast a more modest 10% decline this year. In addition, industry experts say that the housing market may even begin to turn the corner in 2011, but the ascent is likely to be at a rather moderate speed. Commercial and industrial building work may take slightly longer to recover.
The emerging markets of Brazil and Argentina, meanwhile, have continued on their positive growth paths. Preliminary data from Brazil’s cement association, SNIC, show that sales in December 2010 reached 4.8Mt, taking full year local market sales to 59.1Mt. This is an increase of 14.8% compared to 2009. The Brazilian domestic market has been experiencing fast-paced growth with sales rising from 45Mt in 2007 to 52Mt in 2009. The country is expected to show strong continued demand, driven both by the expansion of the civil construction market and major infrastructure projects in progress throughout Brazil under the federal government’s Growth Acceleration Programme (PAC). In addition, the country must push ahead with projects associated with the 2014 FIFA World Cup and the 2016 Olympics. However, much of this building is behind schedule so the race is on to see whether the country can deliver planned projects in time. In addition, a key step in consolidating the favourable outlook for the Brazilian construction industry will be the government’s commitment to maintaining sound macroeconomic stability.
Argentina, meanwhile, has reported domestic sales of 10.16Mt in 2010, up 10.3% YoY from 2009. December 2010 figures stood at 904,266t, a YoY increase of 23.3% on December 2009. The local construction sector has been showing signs of recovery since late-2009 and the housing market began reversing its declining trend last year. A survey of firms engaged in public-works projects showed that those companies expecting an increase in their business in 2011 jumped to nearly 39% from 29% in the same poll conducted in October. As for companies engaged in private-sector construction projects, those expecting an improvement in business more than doubled to nearly 36% from 14% a month earlier. Moderate but steady growth is forecast for cement demand in Argentina for 2011-12, which is predicted to be met entirely by local production as producers, including Loma Negra, are focussing on modernising facilities.