Spain's cement consumption fall accelerates

Spain's cement consumption fall accelerates
19 October 2012

The latest cement sales figures coming out of Spain offer little, if any, hope for the country’s cement producers that business may be picking up. While in August, a 34 per cent drop in sales was noted, September registered a worse contraction. Consumption barely made 1Mt, thus recording a 38 per cent decrease MoM to 1.047Mt. Cement factories noted a 27 per cent fall in output to 1.272Mt in September.

For the year to date, national cement consumption fell by 34.6 per cent to 10.61Mt in the January to September period while production declined by 28.1 per cent to 17.555Mt.

Moreover, further cuts in infrastructure investment combined with spiralling power bills eliminate any hope of short-term recovery, according to Spain’s cement association Oficemen.

Looking forward, the forecast for 2013 sees no light in the tunnel ahead. The draft law on energy reform put energy prices on an upward path with the cost of power expected to rise between 14-15 per cent, considerably damaging the industry’s competitive clout. While in 1983, some 13Mta of cement were exported, this year the figure will more than halve to 6Mt. In addition, the newly-released Housing and Transport Infrastructure Plan points to a decline in annual public investment, at around one per cent of GDP.

The Economic Research Department of Oficemen published its first estimates for 2013, forecasting a further drop of 20 per cent. "Since we start from a paltry turnover of only 14Mt, a new double-digit drop in 2013 put us in a situation that can only be called true cataclysm for the Spanish cement industry," says the association’s CEO Aniceto Zaragoza.

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