Brazil's cement demand stable in March

Following a good first half to the month, Brazilian cement consumption saw a sharp decline in the second half of March, according to the country’s cement association, SNIC. The fall was attributed to the circulation restrictions and a reduction in the pace of works as public transport, trades and support services near the buildings were limited.

Therefore, cement sales in March remained stable when compared to March 2019 and slipped 0.5 per cent MoM to 4.1Mt. However, when cement sales per business day were considered, a 10.4 per cent YoY and a 15 per cent MoM drop to 168,900tpd was reported.

The country’s northern region saw consumption fall 9.2 per cent YoY, followed by the midwest and southern regions, which reported YoY decreases of 4.8 and 4.3 per cent, respectively. In the northeast demand was down 2. 6 per cent YoY. However, strong residential construction saw cement consumption advance by 4.6 per cent YoY.

Exports increased from 9000t in March 2019 to 15,000t in March 2020.

In the first quarter of 2020 cement sales were down 0.3 per cent to 12.635Mt when compared with the 1Q19. In terms of cement sales per business day, the drop was 1.8 per cent. However, exports were up by 70.8 per cent YoY to 41,000t in March 2020 from 24,000 a year earlier.

Outlook
Following a growth of 3.5 per cent in 2019, SNIC had forecast a three per cent market expansion for 2020 as macroeconomic indicators and the movement of the real estate sector were promising a positive impact on cement consumption. However, the coronavirus pandemic, demobilisation, social detachment and strong measures to restrict the commercialisation of construction materials are expected to impact the cement industry during the rest of the year.

“It is essential that the structured policy with the purpose of bringing liquidity to the economy is consummated, under penalty of causing irremediable damage to the cement activity and its production chain, causing inability to recover and close companies, such as input suppliers, retailers and distributors of cement. This liquidity is essential to maintain the health of the Brazilian economy,” said the cement association in a statement.

The cement industry has developed contingency plans to minimise the impact on the production chain and these include:
• increase and increase in preventive guidelines and training in health care, health and well-being of workers and their families
• expansion of communication actions aimed at all members of the cement industry's production chain with a focus on sanitary prevention of coronavirus
• anticipation of preventive maintenance for the period to combat the coronavirus, which will allow an even stronger resumption, after the crisis
• maintenance of jobs, implementing the measures adopted by the government, collective vacations and hour bank, among other alternatives
• acceleration of innovation, quality and productivity programmes in the cement industry, with an emphasis on alternative fuels and co-processing.