Brazilian cement demand up 1% in June

Brazil’s cement market expanded by 1.4 per cent YoY to 5.253Mt in June 2023 from 5.182Mt in June 2022, according to the country’s cement association, SNIC.

“Brazil's economy is starting to show signs of recovery with the expectation of growth in the Gross Domestic Product (GDP), control of inflation and improvement in labour market indicators. Even so, the Brazilian cement industry remains cautious in its performance assessment, pointing to stable sales in 2023 compared to the previous year,” said SNIC President, Paulo Camillo Penna.

The southeast, Brazil’s largest market, saw sales grow by 2.3 per cent YoY to 2.497Mt in June 2023 from 2.441Mt. In the northeast sales were up 8.2 per cent YoY to 1.014Mt in June 2023 from 0.937Mt. However, in the south the market contracted by 1.3 per cent YoY to 0.856Mt from 0867Mt while in the central-west sales were down 3.1 per cent YoY to 0.655Mt in June 2023 from 0.676Mt. The small northern market saw sales drop by 11.5 per cent YoY to 0.231Mt in June 2023 from 0.261Mt.

Exports declined by 20 per cent YoY to 20,000t in June 2023 from 25,000t in June 2022.

First half 2023
In the January-June 2023 period, the Brazilian cement market contracted by 1.6 per cent YoY to 30.152Mt from 30.629Mt in the equivalent period of the previous year.

The southeast saw sales slip by 1.1 per cent to 14.12Mt in the 6M23 from 14.27Mt in the 6M22. In the northeast off-take edged up by 0.3 per cent YoY to 6.041Mt in the 6M22 from 6.023Mt while in the south sales were down 2.2 per cent YoY  to 5.241Mt in the 6M23 from 5.358Mt. The largest market contraction  in the 1H23 was reported in the central-west, where sales were down five per cent YoY to 3.47Mt from 3.651Mt.  In the north sales slipped by 3.5 per cent YoY to 1.28Mt in the 1H23 from 1.327Mt.

Exports in the first six months of 2023 dropped 42.9 per cent YoY to 116,000t from 203,000t in the 6M22.

Outlook
The cement industry expects an improvement in the coming months, driven by works in the recent real estate cycle, with reinforcement of the Minha Casa, Minha Vida programme, and the resumption of halted works and infrastructure. The federal government's announcement of expanding the subsidy and reducing the interest rates of the MCMV brings encouragement to the sector and should boost investments in civil construction in the country.

“There is still an effective apprehension of the market with the recent alterations of the Basic Sanitation Framework. The Demographic Census released by the IBGE indicated that the Brazilian population increased by 6.5 per cent (to 203m) between 2010 and 2022, while the number of households grew by 34 per cent (to 91m) in the period. This movement makes it more difficult to meet the goals of universalising basic sanitation, but the cement industry is ready to supply the approximately 5Mt of input needed to achieve this goal,” said SNIC.