Indonesian cement demand drops 9% in August

Indonesian cement consumption in August declined 8.9 per cent to 5.86Mt in August 2020 when compared to August 2019, according to the Indonesian cement association, ASI. MoM a 7.5 per cent rise was reported. In the first eight months of 2020 total demand reached 38.47Mt with a capacity utilisation rate of 54 per cent.

"Seeing the condition that up to August 2020 demand is still a deficit of 2.34 million tons, only exports can be expected to reduce the shortage of domestic [consumption]," said ASI Chairman, Widodo Santoso. He attributed the continued decline to delays in infrastructure projects and predicted that new infrastructure development activities will start around September-October.

In addition, cement demand by the residential construction sector has not expanded. The housing sector accounts for about half of domestic cement demand.

In terms of the country’s regions, the east of Indonesia has seen the market expand by up to five per cent with consumption in Bali and Nusa Tenggara up 9.4 per cent YoY to around 0.377Mt. Demand in Maluku and Papua increased 9.4 per cent YoY to 167,000t. However, the key markets of Java and Sumatra, which represent around 70 per cent of the country’s demand, continue to contract. Cement sales in Java fell nine per cent to 3.29Mt while in Sumatra they were down by up to 1.2Mt. Kalimantan was particularly affected as demand dropped 17.9 per cent YoY to 0.323Mt.