Heavy rains impact Brazil's January cement sales performance

Heavy rains impact Brazil's January cement sales performance
19 February 2020

Cement sales in Brazil during January 2020 fell by 0.9 per cent YoY to 4.5Mt as heavy rains in the north and southeast impaired performance, the National Union of the Cement Industry (SNIC) has said.

When based on the number of working days, domestic sales were also down by 0.9 per cent compared to January 2018.

Apparent cement consumption (ie, domestic sales plus imports) totalled 4.5Mt in the first month of 2020, down by 1.3 per cent YoY. The result is a reflection of poor performances in the north (-4.8 per cent) and southeast (-3.2 per cent), mainly caused by heavy rains that hit both regions during the period, particularly Minas Gerais, the largest cement producing state in the country.

Despite the slight retraction, SNIC remains optimistic on the industry's outlook and maintains growth expectations of above three per cent for this year.

Positive indicators
Moreover, despite closing with declining industrial production, the confidence indicators released by the Getúlio Vargas Foundation point to a positive outlook for the beginning of the year. The civil construction confidence index advanced 2.1 points in January to reach 98 points – its highest level since 2014.

"The sector's performance will continue to be basically supported by the building sector. The result of the improvement in the real estate market last year should continue this year, thus leveraging cement sales. The great expectations are due to the announcement by Caixa Econômica Federal about the new residential credit line without correction and the reformulation of the Minha Casa Minha Vida Program that should gain momentum” explained Paulo Camillo Penna, president of SNIC.

Mr Penna also stressed that increasing infrastructure development should be an "immediate" government concern, stating: "The concessions and privatisation program must be accelerated and the paralysed works must be resumed urgently."

The installation of the Tax Reform Commission in the National Congress should also generate a positive environment and stimulate the economy in general, SNIC added.

Published under Cement News