Brazilian cement dispatches slip in May

Brazilian cement dispatches slip in May
09 June 2022

Cement sales by Brazil’s cement producers slipped by 0.8 per cent to 5.487Mt in May 2022 when compared with 5.529Mt in May 2021, according to SNIC, the Brazilian cement association.

Sales have been affected by record-high household indebtedness and reduced household income. The rising interest rate is at 12.75 per cent, making the financing of housing expensive. Political and economic uncertainty are resulting in cautious consumer confidence. Moreover, inflation runs into double-digit figures and unemployment reduction is slow.

For the cement industry, the contraction in demand has been made worse by the continued assault on its cost base. The worsening pressure on the prices of inputs and raw materials continues to have a strong impact. “The war between Russia and Ukraine has created a lot of uncertainty for the cement industry. The strong pressure on oil, gas and coke prices in the global market has substantially affected the sector. To minimise the effects of conflict, the use of alternative fuels has never been more necessary. In this sense, the cement sector has strongly invested and expanded the use of technologies such as the co-processing of alternative fuels, to replace petroleum coke, an essential raw material in the generation of energy in the production process,” said SNIC President, Paulo Camillo Penna.

The market contraction was acutely felt in the small northern region where sales fell by 12.6 per cent YoY to 216,000t. In the south sales decreased by 1.6 per cent YoY to 938,000t while in the key southeast market, the largest in the country, sales were down by 1.3 per cent YoY to 2.608Mt. However, in the northeastern region dispatches increased by 3.6 per cent to 1.048Mt and a small gain was also reported in the central-western market where sales crept up by 0.3 per cent YoY to 677,000t.

Exports were down 18.4 per cent YoY to 31,000t in May 2022 from 38,000t in the previous year’s equivalent period.

January-May 2022
In the January-May 2022 period the domestic market contracted by 2.2 per cent YoY to 25.401Mt from 25.981Mt in the 5M21.

The downturn in sales was the largest in the key southeast market, where sales declined by 4.3 per cent YoY to 11.775Mt, followed by the northeast where sales fell by 3.4 per cent YoY to 5.087Mt. In both the south and the north, dispatches edged up by 0.6 per cent YoY to 4.496Mt and 1.067Mt, respectively. The largest market expansion was reported in the central-west region were sales advance 3.2 per cent YoY to 2.976Mt.

However, exports were up 2.4 per cent YoY to 168,000t in the January-May 2022 period from 164,000t in the equivalent period of 2021.

Published under Cement News