India Cement and Construction Materials #48: July 2019

india A CemWeek Publication

issue 48

Cement

july 2019

& construction Materials

LEADERS Q&A

“No alternative products up to now can effectively replace cement�

Song Zhiping, President of World Cement Association

CW Research

Cement bagging equipment to shrink through 2024

Can the Indian cement industry

continue to rely on

coal?

News

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Analysis

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Market Coverage

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Interviews

|

People

WORLD CEMENT, CLINKER &

SLAG SEA-BASED TRADE REPORT The World Cement, Clinker & Slag Sea-Based Trade Report offers a global analysis of seaborne cement, clinker, slag (GBFS), and fly-ash trade. Trade flows, pricing, trading infrastructure are also detailed, while providing a comprehensive review of terminals, and suppliers of cementitious materials to support your strategic decisions. The report projects main flows through 2023 expected to be shipped by ocean-going vessels and also includes prevailing cement trade prices and bulk / dry cargo shipping rates. Particular emphasis is given to understanding the possible supply options and export terminals around the world. Dedicated cement carriers are also analyzed in terms of routes, age, utilization rates and dead-weight tonnage.

Global analysis and forecast of seaborne trade.

LET US GUIDE YOU.

The World Cement, Clinker & Slag Sea-Based Trade Report enables you to: • • • •

Evaluate the competitiveness of cement, clinker, fly ash and slag market Track cement, clinker and slag prices on a consistent and comparable multi-year basis Compare current sea shipping options Understand the industry with a new level of analytical rigor, enabling you to shape your perspective and priorities

CEM ENT • B UILDING MATERIALS • DRY BULK CARGO & SHIPPING • CHEMICALS • INDUST RIAL MINERALS • INDUSTRIAL EQUIPMENT • PAPER & PULP • PETCOKE research.cwgrp.com •

inquiries@cwgrp.com • sales@cwgrp.com

FEATURES Leaders Q&A: Song Zhiping 04 In an environmentally focused interview, Song Zhiping, President of World Cement Association, addresses the global cement industry’s role in tackling global climate issues, details what has been accomplished so far, and explores possible new business opportunities and revenue streams that a low-carbon economy can bring

14 Insight Analysis: Can Indian cement makers continue to rely on coal?

The energy needs of India’s cement industry continues to shift in line with new regulations and supply opportunities. But the question remains: how can they continue to grow their margins if environmental policies increasingly squeeze their preferences?

Research: Seaborne trade of 18 CW cementitious materials rising to 180 million tons by 2024

Sea-going vessels handled a larger volume of cementitious materials in 2018, in part boosted by an increase in China’s cement imports. CW Research expects volumes to continue rising in the next five years, albeit with a shift in trade flows and with cement no longer taking center stage

india

DEPARTMENTS the editor Canary 2 Letterinfrom a coal mine

rOBERT MADEIRA

3 Average prices for cement in China numbers in brief

increased sharply year-on-year in the first three months of 2019, but fell pronouncedly in South America

Research and Analytics 34 Cement Volumes

Trade tensions and political uncertainty continue to cast a shadow over global cement prices. Nevertheless, some markets continue to experience solid demand from the construction sector

cemweek publisher head of cw group research

Margarida Cunha Editorial Coordinator

Liviu Dinu Mihnea Manea Advertising

Carolina Pereira Juliana Vieira Paulo Cruz Sara Ruas

cement 36 equipment highlights 38 regional news

CONTRIBUTING WRITERS & RESEARCHERS

sANTOSH sHETTYE

BUZZ 40 Top 10 CemWeek, BMWeek and PetcokeWeek stories

04

DESIGN To subscribe or advertise, please contact us at T (India): +91-989-236-1085 E: sales@cwgrp.com ©2019 CemWeek LLC. All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher.

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2024

Research: World cement prices 30 CW continue to slide

& construction Materials

www.cemweek.com/india

Research: Cement bagging 24 CW equipment sales to decline through CW Research assesses how factors such as a contraction in new cement capacity additions, and shifting cement transportation preferences are causing the world cement bagging equipment market value to shrink over the next five years

Cement

The CemWeek Magazine is published by the CW Group LLC

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letter from the editor

Canary in a coal mine

year ago – at a time of much controversy

In this issue, CW Research looks into the world cement

surrounding petcoke, and with the Supreme

bagging equipment market and shows how fewer cement

Court mulling whether to ban the use of the

capacity additions and transportation preferences are

oil refining byproduct as fuel – India Cement and Construction Materials (ICCM) questioned if it would be possible for Indian cement makers to replace petcoke by going back to basics and relying on coal instead.

Now, ICCM once again looks into the use of coal by cement producers in India, and identifies current and future challenges, such as production-related issues, and pricing pressure.

Meanwhile, we had the chance to talk with Song Zhiping, President of World Cement Association. Environmental concerns were the cornerstone of our comprehensive discussion, with Zhiping addressing the global cement

shaping the sector.

CW Research also analyzes the main trends regarding seaborne trade of cementitious materials in 2018, and presents a five-year forecast through 2024, including insights on the evolution of the dry bulk market, world trade, cement consumption, and the role of China’s cement capacity rationalization efforts in boosting clinker trade.

As coal imports continue to rise, and India’s reliance on the fuel is not showing signs of slowing down, the future will tell whether cement producers are paying attention to the canary in the coal mine.

industry’s role in tackling global climate issues, detailing what has been accomplished so far, and exploring possible new business opportunities and revenue streams that a lowcarbon economy can bring.

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Margarida Cunha

Editorial Coordinator

numbers in brief

Cement exshow varying trends in works prices first quarter Average prices for cement in China increased sharply year-on-year in the first three months of 2019, but fell pronouncedly in South America In the first quarter of 2019, on a yearly basis, ex-works prices showed wide regional variation, going from a decrease of 8.4 percent in South America to a surge of 14.9 percent in China. In the latter, higher prices were supported by constrained supply due to stricter regulations on cement production.

During the first quarter of 2019, North and Central American cement ex-works prices increased by 3.8 percent on a quarterly basis, with private investment in the residential segment and public investment in infrastructure contributing to this upward trend.

CHART: Average cement ex-works prices by region (mn tons)

Source: CW Research’s Global Cement Trade Price Report

Also in the first quarter of 2019, South America’s average cement ex-works price fell by 8.4 percent year-on-year, while in Western Europe the regional average ex-works price of cement fell marginally, and in the Mediterranean Basin improved by a small margin when compared to the previous year.

In China, the average ex-works price of cement in the first quarter of 2019 increased 16.7 percent year-on-year, as the local cement sector continues to implement measures to reduce supply considering Beijing’s crackdown on pollution.

CHART: Average shipped cement volumes and retail export prices in select markets during 4Q2018 (mn tons)

Source: CW Research’s Global Cement Trade Price Report

Regarding the region of Asia Pacific excluding China, weak performance in key markets such as Indonesia, burdened by overcapacity, and the Philippines, where local manufacturers face competition from imports, has dragged regional ex-works prices down.

Ex-works prices in the Middle East and in Sub-Saharan Africa remained mostly unchanged from the previous quarter, with only minor corrections below one percent being registered in these regions.

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Leaders Q&A

Song Zhiping

President of World Cement Association In an environmentally focused interview, Song Zhiping, President of World Cement Association, addresses the global cement industry’s role in tackling global climate issues, details what has been accomplished so far, and explores possible new business opportunities and revenue streams that a low-carbon economy can bring.

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Leaders Q&A 2018 was a productive year for the World Cement Association (WCA). In six months alone, the Association welcomed 16 cement producers as new members, with total members now representing over 1 billion tons capacity. Do you think this quick expansion points towards a more conscious and engaged global cement industry?

Registered in London on May 2016, WCA is the first organization working on a global basis to represent the cement industry.

WCA is committed to leading and guiding the cement industry and its stakeholders to undertake social responsibilities with more positive attitude and practical solutions.

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The energy consumption per unit product of emerging market countries represented

by China has been reduced by 30% compared with the past And it commits itself to providing allround value-added services to its members, including reinforcing the connectivity of members and sharing and promoting of new technologies, new equipment, new business models through such platforms as the four professional committees (the Environment and Climate Committee, the Safety and Health Committee, the Technology and Innovation Committee and the Market and Logistics Committee) and the World Cement Conference.

India Cement and Construction Materials Journal

The philosophy and purposes of WCA have been recognized by cement practitioners and stakeholders. The membership of WCA has grown rapidly, with 66 members in 35 countries representing more than 1 billion tons of annual cement production capacity.

At present, the world cement industry is facing challenges from the market, capital, technology, environmental protection and other aspects. Through the platform of WCA, the industry will be more conscious and engaged in the transition to a low-carbon and circular economy, actively respond to social responsibilities and environmental challenges, achieve sustainable development and realize the integration of economy and the nature.

WCA constantly urges the industry to adopt a proactive posture towards tackling climate change. As such, WCA has devised The World Cement Association Climate Action Plan. What are its core guidelines?

Climate change has brought significant challenges to the planet and society. In June 2018, WCA held the first Global Climate Change Forum, at which the WCA Climate Action Plan was extensively discussed and a feasible action plan was made. The main aim is to accelerate the decarbonization process. The core guidelines are:

• As a global organization, WCA will take on its responsibility and mission.

WCA is fully committed to the Paris Agreement objective of limiting global climate warming well-below 2 degrees versus preindustrial times and to increasing resilience of human communities to climate events.

• No more words, actions are needed.

WCA will deepen cooperation at the industry level and explore cross-industry symbiosis model to promote the efforts in the innovation of cement technology and product application, to find good solutions and to achieve a balance between carbon emission reduction and economic benefits. Through the guidance of WCA, we would like to make cement enterprises voluntarily and conscientiously participate in the actions against climate change in a more broad and deep way.

The degree of emphasis on environmental protection and the strictness of policies will directly determine the motivation of enterprises in sustainable development • Environmental protection: take China as an example, emission of dust, SO2 and NOx have been reduced by 80% over the last 30 years.

• Development of waste heat recovery (WHR): by the end of 2018, 95% of China’s cement clinker production lines have been installed with lowtemperature WHR systems. The power generated by these WHR systems amounts to 40 billion KWH per year while an annual clinker output of 1.3 billion tons is taken into account. This is equal to the amount of 17 million tons of coal saving and emission reduction of 35 million tons of CO2, 280,000 tons of SO2 as well as 42,000 tons of dust.

• We promote circular economy in the use of raw materials and fuels.

For example, we promote the use of industrial by-products as alternative materials to save the natural resources to the greatest extent.

Unit: mg/m3 Previous Chinese Previous Chinese standard standard (1985) (1996) Dust NOx SOx

150-800 — —

New Chinese standard (2013)

Ultra-low emission standard (Henan, 2018)

20-30 320-400 100-200

10 100 50

100-150 800-1,600 400-800

How far do you • Energy consumption: cement • Use of cement kilns to co-process think the global various wastes such as municipal production process has been upgraded cement industry waste, sludge, solid wastes, etc. and modified through technological has come towards Taking the lead in this field, European research and development. becoming green cement enterprises already made and sustainable? mature application of cement kiln coOver the past 40 years, the cement industry has made great progress in environmental protection and sustainable development:

processing technology on a large-scale 10 to 20 years ago.

Comprehensive power consumption KWH/ton cement Current level Level of 1980-1990

Clinker heat consumption GJ/ton clinker

<80

<3,000

>130

>3,700

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Leaders Q&A • Clean energy becomes effective.

Explore the use of clean energy such as solar power, wind power and other clean energy to reduce the consumption of fossil fuels.

• C

onstruction of green quarries.

Promptly improve the restoration of the ecological environment, boost efforts in quarry reclamation, and restore the quarry ecology.

• Improve quality and eliminate lowgrade cement.

Emerging markets have unique advantages such as more advanced equipment and technology level and low upgrading and modification cost

in technology fields and equipment • A ttach importance to safety and health: suppliers to enhance knowledge increase safety input and raise safety exchange and increase innovation. level by equipping on-site facilities, personal protection equipment and safety training. More and more cement • Insufficient policy support: European environmental protection policies are plants value the importance of the strict while in underdeveloped countries environment and they have made the policies are more tolerant. The degree of plant areas alike gardens. emphasis on environmental protection and the strictness of policies will directly What do you think are the determine the motivation of enterprises main obstacles preventing in energy conservation, emission better results? reduction and sustainable development.

• Insufficient communication: The The current actions of the industry cement industry in the world is currently focus more on technology, and the not sharing enough new technologies, work on environmental protection and equipment and business models due sustainable development lags far behind to existing barriers. Through regular that on the development of technology knowledge dissemination activities and equipment. WCA will strengthen and global climate change conferences, dialogue with governments and strive WCA gathers well-known experts

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for policy support to promote energy conservation, emission reduction and sustainable development of industries.

• T echnical feasibility needs to balance input and output: The cement industry has developed advanced production technology and equipment, carbon capture and storage facilities, WHR facilities and measures of using alternative materials and fuels to reduce carbon emission intensity. But their application feasibility is restricted by the economic output. How to balance the input-output ratio remains a challenge. WCA will strengthen the technical feasibility and promote its implementation.

• Th e difficulty of promoting new technologies: the cement industry is constantly developing new technologies. For example, the world’s first demonstration project of cement kiln CO2 capture and purification system constructed by Anhui Conch Group Co., Ltd has been successfully put into operation. But it is currently facing challenges in the marketing, sales and promotion of CO2 products.

How can innovation play a role in shrinking the cement industry’s carbon footprint?

The carbon footprint of the cement industry mainly involves raw material extraction, cement production, product application, logistics and transportation, circular economy, etc. By deploying and launching innovative solutions, carbon emission can be reduced: â&#x20AC;˘ Raw material exploitation: search for alternative raw materials At present, the major raw material for cement production is still limestone, and roughly 60% of the total CO2 emission for cement production is derived from decomposition of calcium carbonate.

To cut carbon emission, the cement industry is actively seeking alternative raw materials such as industrial byproducts to replace natural limestone. â&#x20AC;˘ Cement production: reduce the consumption of fossil fuels The fuels used in cement production are mainly coal, natural gas and oil, and the CO2 emission during the combustion process accounts for about 32% of the total. At the same time, cement production requires a large amount of power. Most countries in the world still use coal and oil for power generation.

Therefore, CO2 is emitted indirectly for cement manufacturing, accounting for 8% of the total. The carbon emission

The World Bank predicts that the global carbon emission market will exceed US$3.5 trillion by 2020 in cement production can be reduced mainly through the following two aspects: first, the energy consumption per unit product can be reduced through the innovation of process, technology and equipment and the improvement of management. Second, making full use of the waste heat recovered, solar power, wind power and other clean energy to reduce the consumption of fossil fuels.

â&#x20AC;˘ Product application: adjust product standards and building codes WCA is committed to sustaining and whenever possible enhancing their efforts in the education and training of concrete producers and users, as well as in supporting the professionalization of the construction sector working collaboratively with the other players along the value chain. To lower the comprehensive carbon emission for buildings, WCA promotes the use of low carbon standards and building codes, including those requiring using cement to replace steel and asphalt which are of high-pollution and highenergy-consumption.

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Leaders Q&A • Logistics and transportation: Develop “Cement +” Develop the “Cement +” business, expand the industrial chain and realize the integrated planning and reasonable layout of quarries, clinker production lines, grinding stations, ready-mix concrete batching plants and aggregate production lines, vigorously develop e-commerce to reduce wasting of resources for the transportation of limestone, additives • Equipment optimization: and cement products. in order to reduce energy consumption, the clinker • Circular economy grinding process equipment CO2 emitted can be collected, stored has been constantly and utilized through carbon capture adjusted from tube mill, technology. In addition, co-processing vertical mill to roller press by cement kilns not only makes the system. The preheater wastes harmless but also recycles and has been upgraded saves resources, resultantly eliminate from 5-stage to 6-stage.

CO2 impact on the environment.

However, on average the main production lines What new business of some established opportunities and revenue cement enterprises still streams could the low-carbon use old equipment transition bring to the global installed in the 1980s. cement industry?

So there is a huge room for upgrading.

As a global cement industry platform, WCA has the ability, willingness and resources to find the most innovative • Waste heat recovery: 95% of China’s products, solutions and business models to cement plants have create new business opportunities and new been equipped with revenue sources while supporting the lowWHR system. WHR carbon transition of the cement industry. system generates 25-40kWh/t power per ton of clinker, which reduces energy costs and CO2 emission.

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However, WHR system needs to be widely promoted in other countries.

• Co-processing by cement kilns: co-processing by cement kilns is recognized as the safest technology with the most thorough treatment results. There is no need for secondary treatment and it can treat various wastes in large quantity. By using certain municipal solid waste coprocessing technologies, above 60% kiln fuels can be substituted with alternative ones.

Economic benefits are reaped for cement enterprises. At present, co-processing by cement kiln has become a common disposal technology in the developed countries, but the technology has just been launched in the emerging countries.

• Technology of “carbon capture”: in October 2018, the world’s 1st cement kiln CO2 capture and purification demonstration project built by Anhui Conch Group Co., Ltd was successfully put into operation. The system collects residual carbon emitted which can be recycled and used as resources in agricultural and other industrial fields. The commercialization of such technology will help to turn waste into treasure and generate profits.

• Digital technology: data exchange of artificial intelligence and manufacturing technology has begun to take shape. This technology has the potential to improve resource efficiency and bring new opportunities for energy conservation and emission reduction in the cement industry.

• Carbon emission trading: the World Bank predicts that the global carbon emission market will exceed US$3.5 trillion by 2020, and the carbon trading market will become a gathering place for investment and financing capital at domestic and abroad. Considering that the cement industry is a major carbon emitter and most of the emerging countries have not been officially included in the carbon emission trading system, the carbon trading volume and amount will be huge.

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Leaders Q&A A large proportion of the World Cement Associationâ&#x20AC;&#x2122;s membership hails from emerging markets. What role can these markets play in tackling the industryâ&#x20AC;&#x2122;s main challenges?

Most members of WCA come from emerging markets, such as China, India, Southeast Asia, the Middle East, Turkey, Africa, etc. The cement production lines in these regions and countries were built in recent years, so they have unique advantages such as more advanced equipment and technology level and low upgrading and modification cost. In contrast, established enterprises in mature markets have old technologies and equipment and high reconstruction costs due to their early start.

With the globalization of trade and the strengthening of information exchange, enterprises with backward technology will be urged to make equipment upgrade and modification. The process will accelerate the pace of global technological innovation.

The weak enterprises with high energy consumption and high cost will be phased out

the emerging market countries are still economic development-oriented and the environmental protection policy is not so strict. Therefore, the cement enterprises there are not strongly motivated to pursue energy conservation and emission reduction. On the other hand, after a hundred years of development, the management system of established enterprises has become mature and developed countries pay more attention to the balance between economy and environmental protection. Through learning from them, the enterprises in the emerging markets will make more improvement in energy conservation, However, the management level emission reduction and sustainable of cement enterprises in emerging development. markets is relatively low. Moreover,

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From the perspective of the development trend of globalization and the impact of the Paris Agreement, cement enterprises in emerging markets and mature markets will jointly face environmental and economic challenges. WCA is committed to promoting connectivity, sharing and promoting new technologies, new equipment and new business models and guiding global cement enterprises to jointly fulfil responsibilities and make efforts to promote sustainable development.

WCA expects global cement demand growth to slow in 2019, driven by escalating trade wars between the US and China, and a slowdown in construction activity in key European countries, like Germany and France. Do you think these developments can dampen global cement companiesâ&#x20AC;&#x2122; efforts in meeting their environmental agenda?

There will be repercussions, but the overall benefits outweigh the disadvantages. The slowdown of the total demand for cement will intensify the market competition.

Weak enterprises with high energy consumption and high cost will be phased out while the advantageous enterprises will actively upgrade and modify technologies.

Thus, the entire industry will be inspired to accelerate the environmental-friendly transition and achieve sustainable development.

No alternative products up to now can effectively replace cement

How do you envision the global cement industry in the next decade? Does cement However, cement production also brings have a place in the low-carbon heavy load to the environment. In 2018, economy of the future? the world produced 4.1 billion tons of Compared with copper having a history of 4,000 years and steel with a history of 2,500 years, cement has a history less than 200 years. But cement is an indispensable fundamental raw material and has made a great contribution to the development of human society. No alternative products up to now can effectively replace it, and it will continue to play an important role in the construction in the foreseeable future.

As the world economy continues to move forward and urbanization forges ahead, the demand for cement remains relatively high and technological innovations in cement production and application are promising.

cement and generated 2.5 billion tons of CO2 accounting for about 7% of the total global CO2 emission (data from CSI â&#x20AC;&#x153;Technology Roadmap: Low-Carbon Transition in the Cement Industry.â&#x20AC;?).

The cement industry is the third largest energy consumer. In the face of severe global climate issues, the cement industry, like all energy and CO2-intensive industries, needs to face climate change challenges and undertake relevant social responsibilities. It will play an important role in the low-carbon economy in the future.

The cement industry has been committed to reducing the consumption of coal, oil and other fossil fuels as much as possible through various strategies such as technology upgrading and new energy development. At the same time, we are looking for revolutionary solutions through the technology innovation in cement production and application.

The case in points are as follows: using by-products from other industries to produce high-grade and special cement, replacing steel and asphalt (which are of high-pollution and of highenergy-consumption) with cement for constructing traditional buildings so as to lower the comprehensive carbon emission for buildings, applying carbon products obtained by adopting carbon capture technology to agricultural and other industrial fields. In this way, winwin situation for the cement industry, economic and social development and the ecological and environmental protection will be attained.

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Insight Analysis

Can Indian cement makers continue to rely on coal?

The energy needs of Indiaâ&#x20AC;&#x2122;s cement industry continues to shift in line with new regulations and supply opportunities. But the question remains: how can they continue to grow their margins if environmental policies increasingly squeeze their preferences?

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Insight Analysis

T

wo years ago, Indiaâ&#x20AC;&#x2122;s cement makers were content: demand for their product showed a yearly doubledigit growth, prices were mostly steady, and they were meeting their energy needs with a cheap by-product of the oil refining process: petcoke. This material, mostly considered waste by many industries, found in the energyintensive cement manufacturing a steady and faithful client.

However, that would change by the end of 2017, when the government upped the import tax to ten percent, and forbade most of its use throughout the National Capital Region of New Delhi.

Some were reluctant about the change, as another cheap alternative, fuel oil, was also banned, and decided to invest in equipment to be able to keep using the material. This caused imports to plummet

from 14.93 million tons in 2016-17 to 8.16 million tons in 2018-19. The government later clarified during 2018 that the cement industry was able to use petcoke as a feedstock for its kilns, but by then most players had already turned to a widely present and widely used fuel: coal.

The labyrinth of supply

Consumption of coal in the cement industry surged by 70 percent from the 2017-18 financial year, to 37.22 million tons

Coal consumption by the Indian cement industry (2012-2017, mn tons) Coal volume

20

15

10

5

0 2012-13

2013-14

2014-15

2015-16

Source: CW Research

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At a first glance, coal is the ideal fuel for the industry: India has large reserves of it and aims to continue growing its production, its use is not as tightly regulated as petcoke and fuel oil now are, and their equipment allowed for the full switch or mixing of fuels. However, the use of coal comes at a significant cost.

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2016-17

India is one of the largest and more populated countries in the world, and its economy is still emerging. Due to this, the government is still trying to set up the necessary infrastructure to accommodate the needs of its expanding population, including roads, railways, ports, and, more importantly, power plants.

As the country has estimated reserves of close to 320 billion tons, the government has been focusing on coal as a way to meet the growing energy needs, which has proven challenging.

The domestic supply issue is a thorn in the side of the industries dependent on the fuel, and of the government as well, as most of the mines are in the hand of state-owned Coal India and its many subsidiaries, which are tasked with satiating the ever-growing consumption of Indiaâ&#x20AC;&#x2122;s increasingly expansive industries.

While plans for opening up the industry to private players are still on the table, these keep getting delayed, and the supply glut widens further. Railways and roads are also having trouble with keeping up with the traffic demand.

In the financial year ended March 2019, the country’s coal demand rose by 9.1 percent year-on-year to 991.35 million tons, but its supply shortfall more than doubled to 23.35 million tons, which led to companies importing more coal during the year. Consumption in the cement industry alone surged by 70 percent from the 201718 financial year, to 37.22 million tons.

While the government has been loosening regulations and attributing captive coal mines to mitigate the needs of large industrial players, the issue persists, and cement companies unable to secure one of these during the e-auctions held by the Ministry of Coal weigh their chances: costlier import coal or suffer delays in their fuel supply due to the unreliability of acquiring and delivering the domestic stock?

Costs of the trade Coal prices in Asia have been under pressure from the ongoing trade spat between the United States of America and China. China, one of the main importers of the commodity, has increased its internal supply, despite pledges to cut production to conform with its environmental guidelines, which led to a decrease in prices and demand, especially when compared to 2018. This has further stimulated Indian importers’ appetite for coal, but their gluttony could be punished if prices increase beyond a sustainable level, and that cost bites into their profit margins.

Coal prices in Asia have been under pressure from the ongoing trade spat between the United States of America and China For the 2019 financial year, many companies saw their profits decline, and remain concerned about their energy input, as well as cement prices and demand, the latter of which India Ratings forecast to slow down to a growth of only seven percent in financial year 2019-20, contrasting with the double-digit growth in previous years.

Ambuja Cement, which reported its results in calendar year 2018, said: “Power and fuel costs constituted approximately 25 percent of the total expenses. In 2018, we saw a significant increase in fuel price as compared to 2017. This was because of an increase in the prices of imported coal and petcoke. As a result, the power and fuel cost in 2018 increased by more than eight percent in comparison to 2017 on a per tonne basis.” The company’s net profit before tax also fell by seven percent when compared with calendar year 2017.

Ultratech’s profit increased by eight percent in the same period, but the company’s energy cost also expanded by fourteen percent year-on-year, impacted by higher coal and petcoke prices.

Conclusion The present financial year could prove positive to Indian cement manufacturers, as prices so far have shown an upward trend, while input costs have been subsiding. As any substantial decision regarding petcoke remains to be taken, players are also uncertain whether they should invest on this fuel long-term. Due to the high sulfur content of petcoke, however, most of the conversation around its use is so far negative, which implies a similarly negative decision for those reliant on the fuel.

As prices for imported coal have so far shown a decrease, input costs could shrink, and as demand is expected to continue growing while prices expand, overall profits could increase, industry-wide.

This could mean that coal use within the industry is to continue to rise during the current financial year and beyond, and increases the pressure on the government to provide solutions in order to meet soaring demand, in both the mining and transport infrastructure, especially as renewable energy alternatives within the industry have very few trailblazers.

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feature CW RESEARCH

seaborne Trade of cementitious materials rising to 180 million tons by 2024

Sea-going vessels handled a larger volume of cementitious materials in 2018, in part boosted by an increase in Chinaâ&#x20AC;&#x2122;s cement imports. CW Research expects volumes to continue rising in the next five years, albeit with a shift in trade flows and with cement no longer taking center stage

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feature

C

hina’s move to ban greenfield cement expansions in an attempt to curb emissions and improve the quality of life around its industryheavy cities has proved a boon to cement exporters around the world: overall shipments of cementitious materials by sea increased in 2018, in part due to an increase in imports from China.

“The internal dynamics of the Chinese cement market, unequivocally tilted towards capacity reduction and limits on production by environmental concerns, are behind the surge in clinker imports, accentuating the shift from gray cement to clinker exports as the main driver of seaborne trade of cementitious products”, notes Carolina Pereira, Business Analyst at CW Group.

Demand in the market has continued to expand healthily as the government attempts to promote growth by increasing

infrastructure works, in order to combat the forecast slowdown in the economy, largely affected by the trade war with the United States and other macroeconomic factors.

Global trade of cementitious materials rose to over 150 million tons in 2018 2018 at a glance The international shipping industry is responsible for the carriage of around 90% of world trade. Developing economies are estimated to have accounted for most of the world seaborne cargo shipments in 2018.

The improvement of dry cargo freight rates was driven by global economic growth, which pushed up the demand for essential commodities worldwide.

Global gray cement trade outlook (million tons, 2019F to 2024F)

China is the main driver of dry bulks, with iron and coal as the main commodities traded. Despite the trade war with the US, the Asian giant remains the main importer of these commodities.

From the total cement consumption, 1.4% is traded by sea. Out of the total volume of cementitious products traded internationally, seaborne trade accounts for roughly 80%.

Compared to 2017, the global trade of cementitious materials rose to over 150 million tons in 2018. Between 2013 and 2018, gray cement was the most traded commodity, although only less than two percent of its total global consumption was shipped via seaway. But as projected in CW Research’s previous forecast, clinker, including both gray and white, ended up replacing gray cement as the most traded cementitious commodity by sea, accounting for over 40 percent of the total sea-based cementitious trade in 2018.

Over the same period, gray cement came in second place, with almost 60 million tons traded by sea, followed by ground blast furnace slag. White cement and fly ash accounted for a much smaller portion of the global seaborne cementitious trade, with a combined slice inferior to five percent of total.

The largest volume of cementitious materials is traded in South-East Asia and in Asia Pacific, where the total cargo moved in 2018 is estimated at 70 million tons, out of which both gray and white clinker beat gray cement by a comfortable margin. Asia’s key trade factors include its highly competitive prices and a strong economic development, which favor trade to countries where cement is in short supply.

Source: CW Research

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Main trading regions and pairings (2018, mm tons)

Great Lakes Great Lakes

Western Europe & Baltics

West Coast US

Black Sea & intraMed Basin

North Africa

Middle East Middle East

Asia Pacific

Source: CW Research

Asia-Pacific nations also benefit from trade agreements between themselves that makes the imported or exported material cheaper, among them a reduction in tariffs. As this region also comprises several emerging economies, cement is a highly sought-after commodity in their attempt to modernize and achieve the same development level as mature economies’.

Regarding transportation preferences, bulk shipping continues to make up the lion’s share of sea-based trade of cementitious materials, despite the increased preference for big bags.

Nevertheless, bagged cement shipments continue to represent an important segment of the total seaborne trade.

US-China trade war shifting trade flows During the last trading session of 2018, the Baltic Dry Index – which measures shipping costs for dry bulk commodities, including cementitious materials transported in bulk via sea – settled at

1,271 points, sliding 95 points compared to the same period the previous year.

Clinker replaced gray cement as the most traded cementitious commodity by sea An initially positive outlook for the dry bulk market in 2018 was disrupted by the trade war between the US and China, and since October the cost of transportation of almost all types of dry bulk cargo has decreased. The ongoing trade war is leading to a shift in commercial routes, with China reaching for suppliers of grain

and iron ore in South America instead of the United States.

Furthermore, new fuel regulations to be rolled out by the International Maritime Organization in 2020 are creating volatility and incentivizing vessel scrapping, especially in the Capesize segment.

So far in 2019, demolitions of dry bulk ships in the first months of 2019 have soared compared to 2018, following poor market conditions. Daily earnings for the Capesize market are performing below average, much due to the Brumadinho dam collapse in Brazil, adverse weather in Australia, as well as contracting Chinese iron ore demand. As such, limiting fleet expansions could prove crucial to restore market balance.

When compared with 2018, sea-based trade volumes for cementitious materials are expected to improve at a modest average annual growth rate, reaching almost 180 million tons by 2024.

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feature Seaborne shipping of gray cement is expected to fall between 2019 and 2024, while the clinker and fly ash trade in this period is likely to heat up. Trade volumes for white cement and slag are also forecast

The ongoing trade war is leading to a shift in commercial routes

to grow during this period, although at a more moderate pace when compared with the volumes of the other expanding commodities.

Asia fronts new cement carrier additions In 2018, the total number of active cement carriers surpassed 360 units, each with an average age of 26 years, and the total dead weight tonnage topping 2.7 million, the highest figure recorded since 2010.

Specialized cement carriers move about 25 million tons of cement per year internationally and are now working at a 95% utilization rate. Nonetheless, more stringent environmental regulations and a growing cement trade are likely to lead to both more conversions and new builds.

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Seaborne shipping of gray cement is expected to fall between 2019 and 2024 Apart from specialized cement carriers, cementitious materials are also shipped via general dry bulk carriers, container ships and barges. â&#x20AC;&#x153;Asia accounts for most of the cement carriers operated at the global level. The vast coastline of markets such as Japan, China, or South Korea provides an incentive to domestic coastal shipment, while frequent

storms and strict environmental regulation skew demand in favor of cement carriersâ&#x20AC;?, assesses Carolina Pereira, Business Analyst at CW Group.

Solid demand in Asia has contributed to a turnaround in the market and investorsâ&#x20AC;&#x2122; confidence, and interest in new vessels and conversions has been increasing.

Therefore, most of the newly added vessels found their place in markets such as Japan, Vietnam, Indonesia, the Philippines, etc.

When looking at market shares of large cement companies by cargos moved, LafargeHolcim, HC Trading and Cemex control almost 30 percent of the market.

At the global level, there are almost 800 cement terminals, more than 150 waterside grinding plants (slag and clinker), and almost 100 waterside integrated cement plants. Most of the cement terminals at the global level are located in Far East Asia, followed by Europe.

About the report The World Cement, Clinker & Slag Sea-based Trade Report provides an in-depth and data-oriented analysis of trade-related development, historical trade flows and prices, and changes in exports and imports during the past years from a regional perspective, with a focus on key markets.

The report also projects key cement and clinker supply-demand gaps that will sustain world cement trading for the next few years. Key exporters, their facilities, and traders are profiled, as well as key ocean-going cement carrier operations and their vessels.

Examined trade flows include gray cement, clinker, white cement, and slag, as well as a discussion of fly ash trade, in bag, big-bag, or bulk form.

The report projects main flows through 2024 expected to be shipped by ocean going vessels and includes prevailing cement trade prices and bulk/dry cargo shipping rates.

More information about the report can be found here: https://www.cwgrp. com/research/research-products/ product/287-world-cement,-clinkerslag-sea-based-trade-forecastthrough-2024

For more information and placing an order, please contact Liviu Dinu, Market Services & Marketing Consultant, CW Group (Europe), by phone at +40-74467-44-11, or e-mail at ld@cwgrp.com.

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feature

CW RESEARCH

Cement bagging equipment sales to decline through 2024 CW Research assesses how factors such as a contraction in new cement capacity additions, and shifting cement transportation preferences are causing the world cement bagging equipment market value to shrink over the next five years

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feature

C

W Researchâ&#x20AC;&#x2122;s World Cement Bag and Bagging Equipment Industry Report, which includes a forecast up to 2024, projects the market to contract to USD 154 million in the next five years, tied to several constraints around it. One of the main issues affecting growth for the industry is the forecasted drop in cement capacity additions during the same period, which CW Research assessed in their first quarter 2019 update to their Global Cement Volume Forecast Report.

One of the main challenges to the global cement bagging equipment market seems to come down to logistics preference, as many manufacturers are shifting from shipping their products in bags to containers or other bulk solutions. The other key issue is the projected decline in new capacity

additions, although opportunities may still arise in emerging markets, especially when tied to labor costs, legislations, and overall market preferences.

Asia ex-China is the leader in terms of new cement bagging capacity additions forecast for the next five years, followed by Africa For 2019, new cement bagging capacity is also expected to drop sharply when compared to 2014, when around 66.9 million tons per annum of bagging capacity were added at a global level.

Chart: New and upgraded cement bagging capacity (mn tons, 2014 to 2019)

Source: CW Research Global Cement Bagging Equipment Industry and Forecast 2019

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By 2024, overall annual cement bagging capacity additions are projected at under 54 million tons.

The challenges The dimmer outlook for global economic growth in 2019 is likely to dampen investment in new equipment and machines in several markets. Emerging markets and developing economies in particular are being affected by low commodity prices and the depreciation of local currencies, and the growing trade tensions between two of the largest international markets, China and the United States, will also weigh down growth.

Despite the mildly negative economic sentiment, cement companies continue to develop positively and their investment perspective remains solid, as the industry recovers from the Great Recession years.

Chinaâ&#x20AC;&#x2122;s new policies calling for a curb in cement capacity additions are one of the main boosters of the forecast decline in cement capacity additions in the 2019-2024 period, but this legislation is also expected to impact demand for cement bagging equipment, as it is heavily connected to expansions in capacity, particularly greenfield ones. While demand in some markets is expanding, that is unlikely to translate into other capacity additions, as countries facing overcapacity look at export opportunities.

Outside of China, cement capacity has been expanding, although the growth pace is slower when compared to the breakneck speed achieved in additions during China’s most expansive years, as well as in other emerging economies in Africa and Asia.

Stagnant markets also present their unique challenges, as the long use life of the equipment could lead to a decline in demand.

Additionally, the expansion of the global cement bagging equipment market is conditioned by the currently volatile bulk shipping market, as companies are now swaying towards this transportation method. However, this tends to change from market to market, and is reliant on other factors, including availability of transport, fuel costs and access to transport hubs, the degree of vertical integration between cement producers, concrete manufacturers, and construction companies, as well as many other minute details that affect decisions.

The opportunities The rise in labor costs in emerging markets – particularly those in the Asia ex-China region and in Africa, which have the most potential for expansion of cement and bagging capacity additions – is expected to lead producers to invest in automation across their production line, which would

For 2019, new cement bagging capacity is also expected to drop sharply when compared to 2014 especially benefit the palletizing and wrapping segments of the industry.

Other possible positive developments are new policies in cement transport requirements, and new bag weights or formats, as this would likely push companies to acquire new machines in order to meet these standards.

Bag fillers are still set to remain the largest segment within the industry, accounting for more than half of the total market size, even though their capacity addition rate is expected to decline when comparing 2024 to 2019. Meanwhile, loading equipment

is expected to lose ground over the next five years, in detriment of palletizing and wrapping.

The largest markets for cement bagging equipment are Asia ex-China and Africa, which hold more than half of the market share estimated for 2019, but Western Europe and North Africa are also likely to see a meager growth in their capacity expansion for these machines over the next five years.

The bird’s eye view Regional differences are highly pronounced, with sharp trends in one market being mostly absent from another. Between advanced markets and emerging economies, the trends are very disparate, with some being heavily consolidated and automated, and others still relying on manual labor for their dispatching operations.

In North America and Western Europe, most factories are already equipped with palletizers and wrappers, and few capacity additions either in cement in general or in bagging in particular are expected, other than the odd brownfield expansion or upgrade.

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feature Chart: Cement bag market size by region (2014-2019, bn USD)

Source: CW Research Global Cement Bagging Equipment Industry and Forecast 2019

In Eastern Europe and CIS, demand for new equipment is now being driven by replacements or the expansion of existing plants, similar to the trends in North America and Western Europe, as new capacity addition has slowed down along with the decrease in demand.

Meanwhile, Chinaâ&#x20AC;&#x2122;s efforts to reduce overcapacity will have a large impact on the market, as the rate of retirements is higher than new capacity additions, but demand for bagging equipment could still remain steady as facilities improve their operations or new ones come online in order to replace the outdated capacity in the country.

In the Middle East, new capacity additions have tumbled sharply over the past five years due to several headwinds, but is now stabilizing. However, as labor is cheap, the use of wrappers and palletizers is not as popular, and growth perspectives in this market remain overall subdued.

Latin America has also seen a slowdown in capacity additions, and trends across the

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The expansion of the global cement bagging equipment market is conditioned by the currently volatile bulk shipping market, as companies are now swaying towards this transportation method

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markets tend to vary, with southern markets being keener to use palletizers when compared to their northern neighbors.

Meanwhile, Asia ex-China is the leader in terms of new cement bagging capacity additions forecast for the next five years, followed by Africa. But while in Asia the inflating labor costs are causing companies to consider a switch to automation, in Africa the inexpensive labor means that palletizing and wrapping machines are not as widespread.

Conclusion The cement bag and bagging equipment market is expecting an overall downward trend in the 2019-2024 period, caused in part by Chinaâ&#x20AC;&#x2122;s new policies to deter capacity additions, as well as a global trend to slow down expansions as more and more markets become self-sufficient or reach a state of overcapacity.

This provides both its unique challenges and opportunities, which vary from country to country, and from region to region, with

Between advanced markets and emerging economies, market trends are very disparate, with some being heavily consolidated and automated, and others still relying on manual labor for their dispatching operations some regions, such as North America and Western Europe, being highly consolidated both in terms of cement capacity and their use of machinery, while others are still growing their own production line and are keen on decreasing their labor costs via investing in automation.

The next few years are not likely to be quite so challenging as the ones during the Great Recession, however, as investment within the industry remains healthy, and growth possibilities still abound in the rising markets of the southern hemisphere.

About the report CW Groupâ&#x20AC;&#x2122;s World Cement Bag & Bagging Equipment Industry and Forecast Report addresses important market dynamics and provides a five-year outlook for equipment used in the bagging of cement, including entire dispatch lines.

The report provides a comprehensive view of this market segment, providing critical decision support information for cement and cement bag producers, kraft paper manufacturers, distributors, suppliers of bagging equipment and other stakeholders.

The report explores demand for cement bags and related bagging equipment on a global as well as a regional basis. Additionally, shares for bag vs bulk distribution, market trends and packaging options (kraft paper, polypropylene etc.) are discussed together with an outlook for the industry.

More information about the report can be found here: https://www.cwgrp. com/research/research-products/ product/288-world-cement-bagbagging-equipment-industry-andforecast-%E2%80%93-2019-edition

For more information and placing an order, please contact Liviu Dinu, Market Services & Marketing Consultant, CW Group (Europe), by phone at +40-74467-44-11, or e-mail at ld@cwgrp.com.

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feature CW RESEARCH

World cement prices continue to slide

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Trade tensions and political uncertainty continue to cast a shadow over global cement prices.

Nevertheless, some markets continue to experience solid demand from the construction sector

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feature

I

n the first quarter of 2019, global gray cement ex-works prices showed wide regional variation, contracting in South America, but recording solid growth in China, according to the 1Q2019 update of CW Research’s Global Cement Trade Price Report (GCTPR).

Trade prices for gray cement slipped over the first quarter, continuing the downward trend observed in the quarter that ended in December 2018.

“The global economy continues to encounter significant challenges from trade tensions, to political uncertainty and volatile oil prices. This has had a carryover effect on domestic cement prices with some exceptions. Countries like India, where Pan India prices rose quarter on quarter, buoyed by strong sustained demand from the construction sector”, assesses Prashant Singh, CW Group’s Associate Director.

In the US, cement exworks prices expanded slightly year-on-year, mainly driven by construction and streetand-highway spending Domestic prices up in China and US In China, the average ex-works price of cement reached USD 63 per ton, which represents a double-digit growth rate on a yearly basis. Strict environmental regulations have led to a significant

chart: EX-WORKS REGIONAL AVERAGE PRICES (USD/ton)

Source: CW Research

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reduction of cement capacity and to favorable pricing when compared to the same period in 2018.

In the US, cement ex-works prices expanded slightly year-on-year, mainly driven by construction and street-andhighway spending, which increased in the first months of 2019. In the Middle East, average cement selling prices edged down year-on-year, with Saudi Arabia contributing the most to the decline, as a result of the delays of several projects in the housing sector.

Argentinian ex-works prices slumped over 20 percent when compared to the previous year. A large decrease in construction activity, due to a lack of investment combined with currency depreciation, contributed for the price decline.

Gray cement trade prices to slip further In the first quarter of 2019, gray cement average FOB prices are estimated to have touched USD 59 per ton for the set of 46 countries with estimated data for the period, edging down quarter on quarter.

In CW Research’s set of countries with data for the quarter, Turkey strengthened its position as the largest exporter of gray cement on a global scale, having recorded a yearly surge of over 30 percent in shipped volumes.

With the exception of Asia-Pacific-Japan, all assessed regions are expected to see average FOB prices decline for gray cement in the second quarter of 2019, primarily in South America and SubSaharan Africa.

Japan tops slag exports In the first quarter of 2019, global slag export volumes increased when compared to the previous quarter, with FOB prices soaring over 30 percent when compared to the first quarter of 2018. During 1Q2019, Japan continued to cement its leadership in terms of world slag exports.

Also in the first quarter of 2019, white cement export volumes are estimated to have decreased to one million tons for the set of reporting countries with complete data for the period. In terms of pricing,

All assessed regions are expected to record a decline in average FOB prices for gray cement white cement average export prices remained flat compared to the same period the previous year, while increasing quarter on quarter.

World clinker trade volumes plummeted quarter on quarter in 1Q2019, yet surged year on year. Average FOB prices of the commodity are estimated to have edged up for the set of 24 countries. In 1Q2019, Asia-Pacific-Japan is estimated to have exported nine million tons of clinker.

About the report The Global Cement Trade Price Report (GCTPR) is CW Research’s benchmark price assessment for monthly gray cement, white cement, clinker and granulated blast furnace slag prices and volumes. The 150+ page report, published on a quarterly basis, serves as the industry goto source for monthly price data for over 70 individual markets worldwide, including multiple cornerstone data series: import, export, ex-works and market prices. Additionally, the GCTPR includes extensive discussion of key players’ price strategies as well as trade price forecast and select trade volumes for each country.

The report also provides regional price indices as well as a quick review of trading dynamics and drivers in the different regions. Additionally, the GCTPR includes monthly historical data series, preliminary estimates for the latest quarter, as well as a threemonth forecast for all price types.

More information about the report can be found here: http://www.cwgrp. com/research/research-products/ product/1-global-cement-trade-pricereport

For more information and placing an order, please contact Liviu Dinu, Market Services & Marketing Consultant, CW Group (Europe), by phone at +40-74467-44-11, or e-mail at ld@cwgrp.com.

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CEMENT MARKETS

CW Research

Cement Volumes In March 2019, the countries in the Middle East region saw their performance in both consumption and production trend downwards, as their economic performance has been worsening and increased competition in the saturated markets led companies to cut down on output.

In Pakistan, year-to-date consumption fell by 6.3 percent, as the country’s economy plunged and the government was forced to call for an economic bailout.

In Saudi Arabia, both cement production and demand declined during the first quarter, with production falling 6.3 percent to 11.1 million tons, while consumption stood at 10.8 million tons, a drop of 9.4 percent. While the construction project pipeline in the country remains solid due to the many government and privately-led initiatives, the sector is still facing

a number of issues, from labor and contracting, to overcapacity.

In Pakistan, year-to-date consumption fell by 6.3 percent, as the country’s economy plunged and the government was forced to call for an economic bailout. The cement sector is also dealing with tightening competition in its export markets, and capacity keeps expanding.

Latin America, on the other hand, showed a mild rise in consumption, although Argentina’s crisis took its toll on cement demand for the period.

Argentina’s cement production fell by 2.2 percent year-on-year in the first quarter of

CHART: Year-to-Date Cement Production in March 2019 (%)

Sources: CW Research

To learn more, please contact the CW Research team at sales@cwgrp.com

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CW Research CEMENT MARKETS

2019, to 2.7 million tons, as several headwinds affected its economic output during this period.

Meanwhile, Colombiaâ&#x20AC;&#x2122;s production rose by 4.5 percent, to 3.1 million tons.

Peru had a good performance during the first three months of the year, with production expanding by 5.3 percent from the first quarter of 2018, to 5.3 million tons.

In Asia, India and Vietnam were the top performers during the January-March period, with cement production increasing by 11.7 and 10.9 percent, respectively. Thailand stood out from these economies, with cement demand dropping 2.0 percent on a yearly basis, while

consumption slowed down by 1.4 percent.

In China, cement production increased 3.9 percent in the first quarter of the year, despite the continued curbs on output and overall operations, totaling 391.5 million tons.

In Indonesia, cement consumption remained mostly in line with the equivalent period of the previous year, with not many changes happening in the market during the first three months of the year.

CHART: Year-to-Date Cement Demand in March 2019 (%)

Peru had a good performance during the first three months of the year, with production expanding by 5.3 percent from the first quarter of 2018, to 5.3 million tons.

Sources: CW Research

To learn more, please contact the CW Research team at sales@cwgrp.com India Cement and Construction Materials Journal

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cement orders & equipment

O

rders & equipment

Rockwell Automation improves standardized processes for cement plants Rockwell Cement enhanced its process functions for cement producers, now including pre-engineered and tested process instructions and operator faceplates developed along with manufacturers in order to standardize equipment and system configurations, and to optimize operations across plants.

The cement functions were added to the Rockwell Automation PlantPAx DCS, which allows them to be integrated and used across all plant operations.

The modern DCS also uses a common automation platform for the integration between critical areas of a cement plant, including process, power, information, and safety control.

The functions include processes such as motor and drives control, valve operations, and sequencing group controls, among others. These functions help cement producers get one step further on their journey to achieve a fully connected cement plant

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â&#x20AC;&#x201C; offering opportunities to improve plant-wide efficiencies, reduce safety risks and drive better decision-making.

Included as part of this launch are additional features including support

India Cement and Construction Materials Journal

for larger systems, improved library instructions, Windows Server 2016 support and Asset Centre 9.0 backup agent. These enhancements, as well as the additional functionality, improve control in all industries.

Haver & Boecker renames Indian subsidiary

Haver & Boecker’s Indian subsidiary, formerly known as HAVER IBAU India, was renamed to Haver & Boecker India.

In 2008, the company started its operation as a 100 percent subsidiary of Haver & Boecker’s machinery division (Germany) and its daughter company Ibau Hamburg (Germany). “Our initial focus was the Indian Cement Industry and this we wanted to show also in the name. With Haver & Boecker and Ibau Hamburg we combined the names of the two leading companies in the field of (un-)loading, storing, mixing, transporting, weighing and filling all types of bulk materials.” explains Dr. Fabian Festge, former Managing Director of Haver Ibau India until 2013 and todays General Manager of Haver & Boecker.

While the cement industry still plays a key role in the company’s present and future, more and more Indian customers in the Building Materials, Chemicals and Food industries are approaching Haver & Boecker in search of automation and high-end technologies. The name change to Haver & Boecker India symbolizes the organization’s motivation to fill the demands of all of its customers, being the local gateway to all Indian customers for every solution offered by the German technology manufacturer.

“Our goal is to offer the complete machine division line of Haver & Boecker products and services in India” says Norbert Wirth, Managing Director of Haver & Boecker India since January 2018.

Beginning a new era in the activities of Haver & Boecker’s machinery division in India, Haver & Boecker’s wire weaving division continues its activities through Haver Standard India, a since 1988 established joint venture between Standard Wire Products Group and Haver & Boecker.

“When you buy Haver & Boecker technology anywhere in the world, you can be assured that you are receiving the worldwide recognized Haver performance and quality, resulting from attention to detail, careful component selection and customized solutions; regardless of your industry or region” Wirth ensures.

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cement Regional news

R

egional news

UltraTech to set up new cement project in Andhra Pradesh

UltraTech Cement has received the environmental ministry’s approval for a planned greenfield INR 2,500 crore project in Andhra Pradesh.

The project envisions an integrated cement plant in Petnikote, in the Kurnool district, with a clinker capacity of four million tons per annum, six million tons per annum of cement, 60 mW of a captive power plant, as well as 15 mW of waste heat recovery-based power unit.

The company has already acquired 431.92 hectares worth of land for the project, but it will still need to obtain “consent to establish and operate” from the Andhra Pradesh Pollution Control Board, according to the environmental ministry.

India’s cement sales decline in 1QFY20 India’s cement sector is likely to see subdued growth in the April-June quarter caused by the muted demand, with the elections causing part of the disruption.

The decrease was caused by a slowdown in government spending, labor scarcity, decreased water supply and lack of private capital expenditure, especially as most government projects were put on hold due to funds being in retention from the code of conduct.

“The domestic cement companies are likely to report subdued sales volume in 1QFY20 led by soft demand scenario, as the industry’s demand is expected to have witnessed 7-10 percent de-growth during the quarter. A slowdown in government spending on the backdrop of General Elections, labour unavailability, water

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scarcity and persistent absence of private capex took a toll on demand. The cement companies under our coverage universe are expected to report an average ~2 percent YoY de-growth in volume, despite ~6 percent YoY growth in UltraTech Cement’s sales volume led by new capacities,” Reliance Securities said in a report.

“Despite a slowdown in government projects during the elections and a labour shortage, average cement volume growth was a decent ~13 percent y/y in FY19 (1 percent y/y in April’19). The pressure on pricing is likely to continue for a few months considering the contraction in demand combined with the impact of the monsoons. However, we expect volume growth to average ~5-6 percent in FY20 on the high base,” Anand Rathi said in a report.

Ambuja Cement looking for several new assets Ambuja Cement is looking to acquire capacities in the ready-mix concrete and aggregates businesses in order to continue its growth, as well as additional cement capacities.

Indian real estate developers call for lower tax rate on cement

The real estate sector in India wants the Goods and Services Tax (GST) rate in India to decrease from the current 28 percent, with luxury items, to eighteen percent.

in the housing sector, but also in the infrastructure industry. However, a reduced GST rate on construction materials like cement and steel would also result in increased financial strain in terms of overall revenue loss – perhaps not an ideal circumstance in a period of constrained economic growth,” said Anuj Puri, Chairman, ANAROCK Property Consultations.

“By bringing the GST rate for cement into the 18% slab, the Government indirectly helps create more construction and development-related jobs, not only

Experts are still wondering whether this will mean a decrease in housing prices, and warn that loan rates have more impact on this issue.

Indian manufacturers to benefit from declining petcoke, coal prices

Prices for imported petcoke have remained mostly unchanged, at the USD 95-100 ton per range, while domestic coal availability has improved post restocking at power plants. Freight costs are also likely to be stable in the June quarter, as diesel prices remain unchanged and new norms promote higher loads.

India’s cement manufacturers are expected to see some relief as input costs ease, with domestic petcoke prices dropping by thirteen percent quarter-on-quarter in the three months until June, to INR 7,600 per ton, while international thermal coal prices dropped 21 percent.

”The company continues to look at all growth options in cement and other building materials segments like ready-mix concrete (RMC) and aggregates,” a company official said.

“Inorganic growth in cement business depends on value-accretive options.”

Ambuja Cements was one of the firms which had bid for Binani Cement last year, but lost out to UltraTech over a higher valuation.

“Globally, cement giants have looked at developing a building materials image besides that of a cement maker.

The focus for Ambuja looks to be on similar lines,” said Nitin Bhasin, head of research at Ambit Capital.

“However, RMC’s capacity in India is largely unorganised. So, it will be difficult for a Holcim entity to make acquisitions in such a market.

In addition, the company has so far disappointed in term of growth capital as the Rajashtan greenfield expansion is yet to be complete,” Bhasin added.

Despite this, cement demand is still slowly growing, having only improved by one percent year-on-year in April, to 28.7 million tons, in part due to the slowdown in government projects ahead of the elections.

Due to this, prices dropped by INR 7 per bag in June, having reached an average of INR 361 per bag across India, and reversing the high rises seen in May.

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Flashback NEWS FLOW IN CEMWEEK.COM LAST TWO MONTHS (darker blue shows higher news volume)

Russia 17 articles Germany 16 articles Turkey 20 articles United States 18 articles

Ukraine 17 articles

Pakistan 24 articles

Egypt 44 articles Senegal 16 articles

Philippines 28 articles Indonesia 21 articles

Brazil 17 articles

cw Research agenda / reports The CW Research will be hosting and participating in a number of webinars and conferences. We invite you to join us on-line or in person at the events to discuss our views of the industry. To learn more, please visit https://www.cwgrp.com/research/webinars-and-meetings

Cw Research's newest reportS:

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World Cement, Clinker & Slag Sea-Based Trade Report

World Cement Bag Global Cement & Bagging Equipment Trade Price Report Industry & 2Q2019 Forecast Report

May 2019

May 2019

India Cement and Construction Materials Journal

July 2019

BUZZ

Switzerland: Cement deliveries decline in second quarter 2. LafargeHolcim investing in French mill 3. Cement prices in China expected to trend downward 4. Cement clinker prices drop in Yangtze River Delta region 5. Pakistan’s cement prices to rise in July 6. China: Hebei curbing cement production in July and August 7. Reconstruction programs to boost Iraq’s cement demand to over 30mn tons by 2024 8. Demand for cement in China still at healthy pace despite weather constraints 9. Cement prices in Argentina to surge on continuous inflation 10. World cement prices continue to slide in 1Q2019

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Petcoke still accounting for most of Nova Scotia Power’s electricity generation 2. Indian manufacturers to benefit from declining petcoke, coal prices 3. US: Richmond ponders prohibition of petcoke storing and handling 4. Russia’s export duty on petcoke to decline in July 5. Ridley Terminals’ petcoke shipments decline slightly in 2018 6. Petcoke prices in China drop in late June 7. New port project in Brazil to handle petroleum coke 8. Petcoke prices in Russia rise in May 9. Chinese refinery offering about 600 tons of petcoke 10. China: Online platform launches official trading of petcoke

power reach

short thermal volume

petroleum

increased

LAFARGE

waste

investment

decline

IRAN

1.

saudi

india

produce

TOP petcokeweek STORIES

imports

exports consumption crore

imports

product

official

lafargeholcim short

imports

seeks

GRANITE

region results

india

TOP BMWeek STORIES 1.

LafargeHolcim allegedly interested in BASF's construction chemicals business 2. HeidelbergCement strengthens vertical integration in central France 3. Fly ash usage in India doubles in a decade 4. Saint-Gobain to stop distributing in Denmark 5. Global Cement and Concrete Association launches chapter in India 6. UK construction workers urged to modernize building methods 7. Mexico's construction sector grows in May 8. Australia’s construction activity drops in June 9. Internet of Things gaining popularity in the construction sector 10. Construction materials prices continue to rise in Vietnam

produce India Cement and Construction Materials Journal

JULY 2019

41

GLOBAL GLOBALCEMENT CEMENT TRADE TRADEPRICE PRICEREPORT REPORT TheThe Global Global Cement Cement Trade Trade Price Price Report Report (GCTPR) (GCTPR) provides provides a must-have, a must-have, data-centric data-centric assessment assessment of monthly of monthly andand quarterly quarterly prices prices (USD (USD per per ton)ton) for for cementitious cementitious products products - gray - gray cement, cement, white white cement, cement, clinker clinker & granulated & granulated slagslag (GBFS): (GBFS): Ex-works Ex-works andand retail retail prices prices Trade Trade pricing pricing Together Together withwith insights insights on cement on cement producers' producers' pricing pricing strategies strategies andand importimportant ant price price revisions, revisions, the the GCTPR GCTPR provides provides insights insights andand datadata on on domestic domestic cement cement pricing pricing for over for over 30 key 30 key markets, markets, as well as well as international as international trade trade prices prices for 70+ for 70+ cement cement markets. markets.

Analysis Analysis and and forecast forecast ofof global global cement cement trade. trade.

LET LET USUS GUIDE GUIDE YOU. YOU.

TheThe report report not not onlyonly provides provides historical historical monthly monthly andand quarterly quarterly price price informainformation,tion, but but alsoalso offers offers a three-month a three-month forecast forecast for each for each country. country.

TheThe unique unique report report is built is built on CW on CW Research’s Research’s longlong andand proven proven expertise expertise in the in the cement cement industry. industry.

TheThe GCPR GCPR is intended is intended as as a tool a tool for for understanding understanding the the national, national, regional regional andand international international cement cement pricing pricing environment environment andand the the around around the the world. world. competitive competitive price price scenario scenario in key in key markets markets CEM CEM ENTENT • BUILDING • B UILDING M ATERIALS M ATERIALS • DRY • DRY BULK BULK CARGO CARGO & SHIPPING & SHIPPING • CHEMICALS • CHEMICALS • • INDUST INDUST RIAL RIAL MINERALS MINERALS • INDUST • INDUST RIAL RIAL EQUIPMENT EQ UIPMENT • PAPER • PAPER & PULP & PULP • PET • PET COKE COKE r e s eraersceha. rccwhg. cr pw. gc ropm. c o•m i n• q uiinr qi eusi @ r i ecsw@g cr pw. gc ropm. c o•m s a•l essa@l ecsw@g cr pw. gc ropm. c o m