Brazil cement consumption declines 7% in April

Brazil cement consumption declines 7% in April
14 May 2020

While Brazilian cement sales in April fell 6.9 per cent YoY to 4.1Mt, sales per business day saw a drop of only 2.5 per cent to 185,500t, according to Brazil’s cement association, SNIC.

“After a slightly negative quarter of sales (-0.3 per cent 1Q20 x1Q19), caused mainly by the damming of cement purchases in January and February due to heavy rains, which hit several parts of the country, and the beginning of social isolation and demobilisation of sectors of the economy, which started in March, the sector's forecast for April was pessimistic,” said SNIC in a statement.

“However, due to the commercial strategy of some companies that anticipated purchases - due to the dollar jump that impacts the cost of cement - added to the continuity of the real estate works, the numbers of the industry did not plummet.

“Another positive factor was that the concrete sector has remained in full operation since the beginning of the pandemic, ensuring a continuous flow in the demand for cement and in the execution of works,” the association added.

Due to COVID-19, the industry invested considerably to secure the health and safety in its cement plants, implementing strict measures of asepsis, detachment and team scheduling, to maintain not only the health of its workforce, but also to maintain jobs and keep the factories running. In addition, it took advantage of the period to anticipate scheduled maintenance.

Looking ahead, the outlook for the industry remains unclear. Expectations at the start of the year indicated a market expansion of more than three per cent in 2020, showing the first positive year after four periods of recession in the sector. Despite April seeing modest growth compared to March, the accumulated figure is already points down and could be difficult to reverse in the rest of the year, SNIC believes.

“The scenario imposed by the COVID-19 pandemic is almost indecipherable at this moment and requires us, daily, to review our projections. What we have today is a photograph and not a film that could more accurately indicate the scenarios that we will have ahead,” said SNIC President, Paulo Camillo.

“So far, despite the fact that we are almost completing the second month of social isolation, it has not yet been possible to feel a large impact of falling wages, with a decrease in employment and income, which should be more evident in May. All of this, accompanied by a drop in business confidence in general, reducing medium and long-term investments.

“If this happens, the sector should feel a lot, with the possibility of returning to the performance of the crisis period,” predicts Mr Camillo.

Published under Cement News