Spain: cement consumption to drop 20% in 2013

Spain: cement consumption to drop 20% in 2013
Published: 18 December 2013

Tagged Under: Spain Europe Oficemen Consumption 

National cement consumption is expected to register a double-digit decline for its sixth-consecutive decline as Spanish cement association, Oficemen, put the YoY drop at 20 per cent.

Oficemen also points out the decreasing profit margins for the country’s producers as demand continues to falls and production costs move in the opposite direction. The lack of competitive power prices, which sees price differences between Spanish and German power of around EUR15-30/MWh have pushed up production costs of Spain’s cement manufacturers by EUR1.5-3/t of cement. According to Isidoro Miranda, Oficemen’s president, this has forced some cement plants to halt production.

Moreover, the current ongoing issue of electricity reform, put forward by the country’s government, is expected to push up power costs even further and erode the sector’s competitiveness in terms of export sales.

Since the heights of 2007, cement demand in Spain has fallen by 80 per cent to below 11Mta this year. About 57 per cent was sold to the civil works sector, while the non-residential market accounted for 24 per cent and housing 19 per cent.

Looking ahead, Spain’s national cement consumption is forecast to fall a further 7-8 per cent in 2014 to some 10Mt before picking up in 2015, according to the association.