Cement sales in Brazil advance 17% in December

Cement sales in Brazil totalled 4.7Mt, up 16.6 per cent YoY, according to the National Union of the Cement Industry (SNIC). However, per working day, sales declined 13.2 per cent to 208,400t when compared with the previous month. SNIC attributes the fall to uncertainties in the economy and civil construction in 2021.

The domestic market saw a 16.6 per cent rise to 4.689Mt while exports advanced 55.6 per cent to 28,000t in December 2020 when compared with December 2019.

Full-year 2020 demand
In 2020 the Brazilian market saw sales of 60.786Mt of cement, up 10.9 per cent YoY and a return to the level of sales noted in June 2016. The key drivers were emergency aid, self-construction and the real estate sector, which supported 80 per cent of cement sales.

Domestic sales totalled 60.5Mt, up 10.7 per cent YoY, from 54.655Mt in 2019. The northeast and central west led market growth in 2020 with sales up by 14.5 per cent to 12.628Mt and 14.3 per cent to 6.923Mt, respectively. Growth was also robust in the north, where consumption increased by 11 per cent YoY to 2.669Mt YoY, and in the south, where offtake went up by 10.1 per cent to 9.9Mt. The country’s largest market, the southeast also reported healthy growth at 8.5 per cent. Its sales in 2020 reached 28.41Mt.

Exports rose by 76.6 per cent YoY to 256,000t in 2020 from 145,000t in 2019.

“All of this was only possible due to the quick actions taken by the cement industry, which made possible, in the midst of a surprising demand pressure, the continuity of regular supply and quality of the input, even in a scenario of strong increase in production costs,” said the association in a statement.

“We are experiencing a roller coaster in the 2020 projections. Before the pandemic, we estimated a three per cent growth. In April, with the sharp drop in demand, we expected a retraction of seven to nine per cent in the year. From June to October, the cement industry recorded a strong recovery followed by a November and December of moderate growth. All of this led to a surprising 11 per cent increase in sales,” highlighted SNIC President, Paulo Camillo Penna.

Outlook for 2021
Market growth in 2021 is forecast to be a modest one per cent YoY as emergency aids ends, a reduction of real estate stock, rising inflation and increased unemployment are key factors in the development of the cement market.

In addition, an increase in production costs, especially commodities, and the fiscal deficit that impacts infrastructure development are expected to increase market uncertainty in 2021.