Heavy rains and floods impact Brazil's cement demand in May

 Heavy rains and floods impact Brazil's cement demand in May
14 June 2024

Adverse weather conditions and flooding in Rio Grande do Sul have impacted Brazil's cement dispatches in May 2024, reports the country's cement association, SNIC. Domestic sales were down 5.3 per cent YoY to 5.269Mt in May 2024 when compared with 5.562Mt in May 2023.

Southern Brazil saw a 16.3 per cent YoY drop in sales to 0.816Mt in May 2024 from 0.975Mt, while in the southeast sales were down 6.6 per cent YoY to 2.477Mt from 2.651Mt in May 2023. In addition, in the central-western region dispatches fell by 5.5 per cent YoY to 0.634Mt in May 2024 from 0.671Mt in May 2023.

Exports plummeted by 81.8 per cent YoY to 4000t from 22,000t in May 2023.

However, industry confidence continues to advance, according to SNIC. "The perception of demand continues to gradually improve, with inventories approaching normality. There is a positive perception of the business environment for the second half of the year, with the job market heating up and the wage bill rising.

"However, it is worth highlighting that the index did not capture the damaging publication of Provisional Measure No. 1,227, on 4 June, whose effect directly impacts the competitiveness of the industry and the cash flow of companies, as it limits and makes it impossible to offset tax credits from PIS/COFINS. This measure goes against the government's assumptions, foreseen in the Nova Indústria Brasil programme," said SNIC.

January-May 2024
In the January-May 2024 period cement sales in Brazil edged up 1.1 per cent to 25.138Mt from 24.867Mt in the 5M23.

Sales in the largest market, the southeast remained stable at 11.593Mt while dispatches to the northeast, the second-largest market, saw a 3.7 per cent YoY uptick to 5.206Mt in the 5M24 from 5.02Mt. However, sales in the south slipped 2.2 per cent YoY to 4.287Mt in the 5M24 from 4.385Mt in the year-ago period. Off-take in the central-west was up 2.2 per cent YoY to 2.878Mt from 2.815Mt in the 5M23. The country's smallest market, the north, saw a 11.9 per cent increase in its demand to 1.174Mt in the January-May 2024 period from 1.049Mt in the equivalent period of the previous year.

Exports dropped by 69.1 per cent YoY to 30,000t from 97,000t in the 5M23.

Published under Cement News