Mozambique prices expected to fall

Mozambique prices expected to fall
22 October 2012

Mozambique’s minister of industry and trade Armando Inroga expects cement prices will fall by year-end as production stabilises. Further reductions are expected next year as competition increases with new facilities coming on-stream.

In the capital Maputo prices have climbed from MZN215/50kg bag (US$7.5) to MZN240 (US$8.3). Prices are reported to be much higher in the central and northern provinces. For example, in Sofala, Nampula, Niassa and Cabo Delgado, prices are in excess of MZN350/bag and in Manica the price has reached MZN500.

Speaking to local press, Mr Inroga blamed the steep escalation of prices on a breakdown at the country’s largest cement factory, Cimentos de Mocambiqe, in August this year.

The minister said national cement production is usually between 170,000 and 200,000t a month but since August production has plummeted, putting the amount of Mozambican cement currently available at between 97,000 and 130,000t a month.

He believed that, as from November or December, even with the heavy demand for cement for major public works, the country will return to "relative stability in cement prices".

The government has been urging more companies to invest in cement production, in the hope that competition will push the price down. Next year, Mr Inroga said: "we believe that the price of cement will fall again, when three new cement factories begin operating. We believe that the ideal price for cement on the market should be no higher than MZN200/sack," AllAfrica news reported.

Mr Inroga noted that two factories should have begun production this year, but their opening has been postponed into 2013. They will each have the capacity to produce 500,000tpa

Mozambique's largest factory, with a capacity of 2Mta, is being built at Salamanga, south of Maputo, and should start producing in 2014.

"We will have a production capacity of about 5Mta as from 2014, rising to 7.5Mta in 2015", forecast Mr Inroga. "At that time despite the major construction projects underway, the cement price will be MZN200 a sack, because there will be sufficient supplies".

Published under Cement News