india A CemWeek Publication
issue 40
Cement
FEBRUARY / MARCH 2018
& construction Materials
LEADERS Q&A
Norman Greig Secretary General of the World Cement Association CW RESEARCH
The Recovery of World Cement Prices Country Snapshot
Nepal’s Climbing Cement Market Insight Analysis
How Far Will Indian Cement Go Without Petcoke?
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Analysis
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Market Coverage
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Interviews
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People
GLOBAL CEMENT TRADE PRICE REPORT The Global Cement Trade Price Report (GCTPR) provides a must-have, data-centric assessment of monthly and quarterly prices (USD per ton) for cementitious products - gray cement, white cement, clinker & granulated slag (GBFS): Ex-works and retail prices Trade pricing Together with insights on cement producers' pricing strategies and important price revisions, the GCTPR provides insights and data on domestic cement pricing for over 30 key markets, as well as international trade prices for 70+ cement markets.
Analysis and forecast of global cement trade.
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The report not only provides historical monthly and quarterly price information, but also offers a three-month forecast for each country. The unique report is built on CW Research’s long and proven expertise in the cement industry. The GCPR is intended as a tool for understanding the national, regional and international cement pricing environment and the competitive price scenario in key markets around the world. CEMENT • BUILDING M ATERIALS • DRY BULK CARGO & SHIPPING • CHEMICALS • INDUST RIAL MINERALS • INDUST RIAL EQ UIPMENT • PAPER & PULP • PET COKE research.cwgrp.com •
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FEATURES Leaders Q&A: Norman Greig 04 Norman Greig, the Secretary General of World Cement Association, discusses issues such as the cement sector’s main economic challenges, strategies, alternative fuel usage and sustainability practices
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CW Research: World cement prices to stabilize in 1Q2018
FOB prices for gray cement increased globally in the last quarter of 2017, and are projected to record a general stabilization in the first quarter of 2018, according to the latest update of the Global Cement Trade Price Report (GCTPR) from CW Research
Snapshot: Moving 22 Country Mountains – Nepal’s climbing cement market
The Nepalese cement industry is poised to attract investors’ attention and exceed 10 million tons of cement demand per year by 2023, amidst a background of regulatory and infrastructure hindrances
Analysis: How far will 28 Insight Indian cement go without petcoke?
india
Cement
DEPARTMENTS 2 Editorial Letter The sinuous path to stabilization
rOBERT MADEIRA
numbers in brief 3 Cement pricing driven by growing demand
Margarida Cunha
across geographies
& construction Materials
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cemweek publisher head of cw group research
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BUZZ 40 Top 10 CemWeek, BMWeek and PetcokeWeek stories
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India’s cement industry is highly reliant on petcoke, but a recent ban on the use of the fuel around Delhi has raised concerns about a country-wide ban, and is forcing companies to seek costlier alternatives.
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letter from editor
The sinuous path to stabilization
he times are changing for the cement industry. Despite a first half of the year marked by a weakened demand, 2017 saw the global cement market start to find its way along a winding road of political setbacks and economic constraints. FOB prices for gray cement increased globally in the last quarter of the year, and are projected to record a general stabilization in the first quarter of 2018. This will be a path built with mergers, capacity absorptions and cost cuts, possibly paving the way towards a more consolidated industry. Overcapacity also remains one of the industry’s biggest question marks, as Norman Greig, the Secretary General of World Cement Association, observes. It is worth paying attention to his thoughts on new markets, sustainability practices and the main economic challenges for the cement sector. But market forces aren’t the only ones shaping the cement sector. Environmental regulations are already shifting our focus when building and buying cement equipment, as we’ve seen in the previous issue, and now they are slowly changing how we make cement as well. In India, petcoke keeps roaming a tortuous route. The domestic cement industry is highly reliant on the fuel, but a recent ban on
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the use of petcoke around Delhi has raised concerns about a country-wide ban, and is forcing cement manufacturers to seek costlier alternatives. Could the golden days of petcoke be burning out soon? After it played an instrumental part in the Industrial Revolution and in cement production, could coal be poised for a comeback? As the world cement industry continues its road towards stabilization, the Nepalese cement market is slowly climbing its way to the top. Entangled in a background of regulatory and infrastructure hindrances, Nepal’s cement sector is still breaking through bureaucratic and clinker transportation issues, and is expected to exceed 10 million tons of cement demand per year by 2023. Oftentimes, the path towards stabilization is a difficult one, made with changes, losses, and reconfigurations. But if the world is ready for a greener and consolidated future, so will the cement industry.
ROBERT MADEIRA
CEMWEEK PUBLISHER HEAD OF CW GROUP RESEARCH
India Cement and Construction Materials Journal
Margarida Cunha
Editorial Coordinator
numbers in brief Cement pricing
driven by growing demand across geographies
Improving cement demand in most regional markets has led to an improvement in cement exworks pricing in the third quarter of the year. In Sub-Saharan Africa, ex-works pricing in the third quarter of 2017 almost reached USD 140 per ton, while at the other extreme of the range, Chinese ex-works prices were a little under USD 35 per ton of cement. For the last quarter of 2017, cement ex-works pricing in China is likely to improve by more than 20 percent quarter-on-quarter, as the shrinking offer for cement will impact competitive forces in the market. CHART: Cement regional average ex-works pricing (USD/ton)
Source: CW Research, CW Global Trade Price Report; Note: 4Q2017 data is estimated and subject to change
Retail-wise, cement prices in France remained stable at around USD 260 per ton in September and in December 2017. For the United States market, we expect the unseasonal high demand for cement of December 2017 to lead to a three percent increase in trial pricing CHART: Cement retail pricing (USD/ton)
Source: CW Research, CW Global Trade Price Report; Note: December 2017 data is estimated and subject to change; Domestic pricing converted from local currency to USD
(for the September to December 2017 period). In neighboring Mexico, after a tumultuous period of debates between construction companies and cement manufacturers over the rapid growth in cement pricing, December 2017 closed with retail cement pricing seven percent lower than the prices of September 2017. India Cement and Construction Materials Journal
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Leaders Q&A
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Norman G r e i g World Cement Association S e c r e ta r y G e n e r a l World Cement Association has a strong focus on environmental responsibility. The Association creates platforms of cooperation, joint analysis and best practice sharing within the industry worldwide.
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Leaders Q&A Norman Greig, the Secretary General of World Cement Association, discusses issues such as the cement sector’s main economic challenges, strategies, alternative fuel usage and sustainability practices. Q: The World Cement Association (WCA) plays a significant role in the industry. How do you characterize the evolution of WCA to date? A: The global cement industry has faced major issues over the last decade, such as new emerging players, significant overcapacity, sustainability and climate concerns, improving the sector’s image around the world, digital disruption as well as positioning the industry as a global contributor to growth and social welfare. Since global problems require global solutions, we think that the need for an effective global organisation, providing leadership and guidance to the cement industry worldwide, is very clear.
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The World Cement Association was established to meet this need. It is the only independent association whose main mission is to represent the cement industry and its stakeholders on a global basis, with a single voice. To fulfil the role of global representation, we will create platforms of cooperation, joint analysis and best practice sharing within the industry worldwide.
WCA is structured to independently represent all levels of the cement industry These kinds of activities will give the WCA a strong voice in international forums, where it can speak clearly on behalf of the global cement industry and help position it as a responsible industry committed to fair practices in its dealings with all stakeholders.
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WCA is structured to independently represent all levels of the cement industry and promote the overall interests of individual cement companies. It currently has founding members located in 30+ countries, which shows the high level of interest shown by industry players in the fresh initiative. However, we expect that WCA will soon become recognised as the leading voice of the cement world, being the largest independent association of the cement industry in terms of number of countries represented. One of the important characteristics of the WCA is that the structure of the Association does not allow a few companies or countries to dominate discussions or decisions. Every corporate member has one vote in electing board members, which in turn will allow WCA to be a truly independent voice for the cement industry. Leaders of the cement industry in emerging markets, in China, India, and Africa all have a chance to express their views on a global scale and make a difference.
In this respect, the theme “Future Strategies for the Cement Industry” will be discussed at the WCA World Cement Conference to be held in December 2017 in London for the first time (in association with Intercem). We sincerely believe that this conference, as a first step towards creating an international platform where the common interests of the global cement industry are shared and discussed, will provide a unique and constructive experience for all industry participants. Q: For better and more effective action in the European cement market, what strategies has World Cement Association adopted? A: The WCA is concerned with global issues (and regional issues which have a global effect) and thus does not define a strategy for action specific to the European cement market. The
European
cement industry is well represented by Cembureau and WCA
shares some common topics such as public relations; energy; sustainability; resources and innovation. The World Cement Association’s aim is to co-operate with regional and national industry associations, and not knowingly compete with or duplicate the effort of any such organizations at a regional level. We welcome and encourage all regional and national cement industry associations to become part of WCA as Affiliate Members and help promote the global cement industry. Q: What are the current most pressing challenges for the cement industry? A: The global cement industry, employing 1.2 million people and having a production capacity of around 6.2bnt, suffers from substantial overcapacity, which is currently the biggest challenge for the industry. Since the turn of the century, driven in large part by China’s domestic boom, global cement capacity has exponentially increased, nearly tripling over the last two decades. Meanwhile, the number of producers has grown to more than 5000.
Although increased capacity was mostly absorbed during periods of high demand, a longer than expected global recession following the 2008 global financial crisis combined with major regional political and economic instability and sluggish demand, to leave significant global excess capacity in recent years, totaling approximately 2bnt.
Overcapacity (...) is currently the biggest challenge for the industry. Currently, China has the greatest excess capacity with 895Mt representing 45% of global overcapacity, of which only a fraction is earmarked for export due to higher inland logistics costs. Meanwhile, Europe has a capacity-toconsumption ratio of 200%, the highest in the world. In addition to low demand in the region,
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Leaders Q&A political pressure to reduce CO2 emissions has kept capacity utilization rates at low levels. Developing regions, such as India, South East Asia and Sub-Saharan Africa, have seen significant capacity growth over the last decade, more than twice the growth in consumption. Despite a capacity-toconsumption ratio of more than 150% in these regions, further capacity expansion is still anticipated in the following years. Political turmoil and low oil prices over the past three years have severely reduced domestic cement demand in the Eastern Mediterranean and Middle East countries, resulting in large excess capacity. In addition, the lack of export markets in neighbouring countries across the Eastern Mediterranean region has created a regional exportable surplus. Q: What can be done to make alternative fuel usage more attractive to cement companies? A: There are significant benefits for the environment, public and cement industry from using alternative fuels. The environment can be cleaned from garbage, the public can avoid landfills, the cement industry can reduce operating costs. Their smart use improves overall sustainability. It is a win-win situation. If alternative fuels (AF) are so beneficial, why does anyone still use conventional fuels? There are a number of constraints: 1. Availability and stability of supply chain. Some AFs are only available in low volume globally and vary regionally. For example, used vehicle tyres have similar calorific value as high quality coal. In many countries used tyres are predominantly discarded in unauthorized landfills or sometimes recycled in other ways. Workable collecting systems must be established.
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2. Fuel quality and consistency. AFs are derived from municipal-, industryor commercial waste. In order to be of acceptable quality, they must be processed to become a useable fuel for the cement industry to avoid production-, quality- and emission problems. Efficient waste processing plants need to be built, but they need money, time and a political will. 3. Unreliability of AF volume and quality delivery. Waste processing plants need to deliver constant AF quality and volume. They need to assure both is guaranteed in order to avoid problems in cement plants. 4. Direct and indirect costs. AF must be cost-competitive in order to be used since additional investment and operational costs in cement plants are considerable. 5. Unjustified social opposition based on fears of emissions and contamination. 6. Considerable regional variations in attitude and understanding of environmental authorities.
There are significant benefits (...) from using alternative fuels The use of AF varies significantly globally. The CSI GNR data collection of 2014 put the global AF replacement level at 16% whereas in some European countries the average replacement in an industry sector was up to 60% and up to 95% in individual cement plants. This shows there is potential if the infrastructure around waste is available. The majority of AF use starts in the cement kiln calciner where the quality requirements are less. Use of AF in the
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main burner requires higher quality. It means finer in particle size, in fluid form and of significant heat value. However, to gain the full benefit of AF, cement manufacturers need to use it in the main burning process as well. Numerous researches suggest that none of the alternative fuels alone could fulfil the entire thermal requirement of cement manufacturing because of either low calorific value, consistency or high contaminants. However, a smart blend of different AFs can in some cases achieve 100% replacement and considerably lower operating cost. For example; Cemex UK’s South Ferriby plant has 100% replacement by alternative fuel, which is a blend of industrial liquid waste (paint, solvent, etc.) and Climafuel, which is made from household residue and commercial waste. RDF (Refuse Derived Fuels) are the most plentiful AFs with about 1400 Mtpa available globally. Quality and production control of these materials need to be improved especially in respect of consistency, heating value, moisture content and foreign object removal. There will be many factors which make it difficult to predict future usage of alternative fuels. AFs are subject to supply and demand factors just like any other material. Different types of waste are more likely to be incorporated into other processes and consequently become more costly. According to CSI/ECRA-Technology Papers 2017, it is assumed that alternative fuel prices will rise up to about 30% of conventional fuel costs in 2030 and 70% in 2050. The key drivers are less likely to be technologic but more social, economic and regulatory such as banning of landfill. What can be done? • Expand waste collecting and processing systems to make AF available
•
• •
Develop and disseminate RDF/AF quality control systems across all of the collecting, supply and end delivery chain. Assure competitive pricing for RDF/ AF Improve burning and emission control by following and evolving BAT (Best Available Technology).
The cement industry has to continue to communicate with communities and manage public perceptions. This includes transparent Corporate Social Responsibility reporting on usage and emissions. It is part of WCA’s aims to promote the use of sustainable materials, and alternative fuels are very high on the list.
There will be many factors which make it difficult to predict future usage of alternative fuels Q: The use of other constituents in cement and the reduction of the clinker-to-cement ratio means lower emissions and lower energy use. What is being done by companies to achieve this goal? A: Data collected by CSI GNR for 2014 indicated a worldwide average clinker to cement ratio (CCR) of 75% or about 1000Mt alternative material in 4000Mt cement. The CCR varies significantly from region to region, but is typically 65% to 95% in 80% of the data collected. It has been reported that average CCR for China is 58%.
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Leaders Q&A There are two broad classes of clinker replacement materials: • Latent hydraulic and/or Pozzolanic such as granulated blast furnace slag (GBFS), pozzolans, fly ash from coal powered plants (FA); • Inert fillers such as limestone.
especially in developed countries, will affect the availability of GBFS and Fly Ash in the future. A major threat to the cement and concrete industry.
Clinker replacement materials have different effects on cement and concrete performance and so intended use is an important consideration. However, the first issue is availability and consistency of the supply chain. This varies greatly regionally and changes with time. The most important and most often used clinker replacement material, granulated blast furnace slag, is available where steel plants are. Pozzolans are only available in relatively few countries where there has been volcanic activity. Fly Ash is subject to power plants following most profitable times to go on the grid. A further reduction of steel making and coal fired power plants,
The cement industry can reduce operating costs
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Inert fillers such as very finely ground limestone is plentifully available and a suitable clinker replacement if added in a very controlled way. But the potential is considerably smaller compared to GBFS or FA, since it has no hydraulic properties whatsoever. It serves as void fillers.
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Price is always a major consideration of those clinker replacement materials. Therefore, fluctuating prices influence the use of those materials considerably and other materials might become more lucrative to use. Another critical issue is market acceptance and conformity with regional standards. It needs a sustained effort by cement makers, users, specifiers and regulators to get new cementitious products included in national standards and accepted in the market place. Intensive research to reduce the amount of clinker in cement, thus improving the clinker to cement ratio and reduce the CO2 footprint is ongoing in academic circles and company laboratories. The results are promising. One example is the Ecobinder project set up by EU with research being carried out in industry and universities on reducing
CO2 emission by 30% in the production of Belite-Ye’Elimite-Ferrit (BYF) class of binders. In recent years, another potentially significant development has happened in LC3 or Limestone Calcined Clay Cement. This blends calcined metakaolin with limestone using the same materials and most existing cement plant processes. It is claimed that the synergy between the metakaolin and limestone allows clinker content to be halved with resultant saving in cost and carbon emission. Unlike the other replacement materials both limestone and clay are abundantly available. Q: WCA is committed to the sustainability of the cement industry. What is the World Cement Association Sustainability Effort? A: The WCA seeks to co-operate with the WBCSD, Cement Sustainability Initiative
and regional Associations.
and
national
Cement
robust KPIs are an essential part of the sustainability matrix.
WCA’s key focus issues include: • Positioning concrete as the material of choice for sustainable construction • CO2 and climate issues • Responsible use of fuels and raw materials, circular economy • Local impacts on land and communities (environmental and social impacts)
The main value that WCA wants to bring is the wider dissemination of best practice relating to sustainability. WCA is a worldwide organisation that represents a range of stakeholders and will encourage the deployment of sustainable practices across the globe with an inclusive, international forum.
WCA recognizes the value and importance of these issues and associated tasks. However, WCA does not envisage setting up parallel task forces but rather to focus on specific issues of members and stakeholders, and to work collaboratively with other bodies.
There are many old plants in the world which are not environmentally advanced or where practices do not have the same focus on sustainability as may be the case elsewhere. Such cases will not be brought to CSI Charter level in one step but will first need education, change of priorities and then gradual improvement. The financial benefits of some environmental improvements should always be highlighted. WCA will request case studies
WCA supports the Global Reporting Initiative and GRI Sustainability Reporting. The availability and use of appropriate and
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Leaders Q&A of such improvements to be published on the website. WCA will promote closing of obsolete unsustainable cement production units and replacement of old technologies throughout the world. WCA members who are representatives of emerging markets will have different priorities and capabilities compared to mature market players and WCA will aim to help them in initiating many small but concrete steps towards building better societies around the world.
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Q: What will happen with the highly oversupplied markets? A: In the long term, current excess capacity in developing regions is expected to shrink to some extent as demand for urbanisation increases over time. However, mature markets like Europe and Mediterranean Basin will continue to struggle with this surplus for a longer time, even though capacity growth will be extremely limited in these regions. However, eventually it is predicted for mature markets that in landlocked areas only eco-friendly, hightech and optimised plants will remain, while coastal areas will meet their needs through grinding mills and clinker imports.
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Q: What are the expectations for the cement industry until 2020? A: First, if the global industry does not take any immediate and drastic measures, the overcapacity problem will continue to exist in the industry in 2020 and beyond. On the other hand, in terms of industry leadership much has changed in the last 10 years and there are new, emerging leaders of the global cement industry today. The Chinese domestic boom taking place since the 1980s has seen Chinese company CNBM/Sinoma, capture the world’s number one spot, replacing LafargeHolcim as the largest cement producer. With a capacity of more than 400Mt, it single-handedly exceeds several countries’ total production. Compared to
2005, when Conch was the only Chinese producer in the top ten globally, five more Chinese cement players, including CNBM, Jidong and Shanshui, have made the list in 2016. It is clear that we are approaching a turning point for the global cement industry and there is no doubt that Chinese and other independent cement companies in particular hold the keys to the future. Furthermore, the industry still appears to be slow in following the rising trends of the era: building sustainability and digitalization. Therefore, these areas still offer big opportunities and are likely to be central to achieving a better public image of the industry, greater cost efficiency and promoting concrete more generally.
Q: The Chinese cement market faces the big challenge of huge capacity surplus. What do you think about it? Can you point solutions that can help the market address this problem? A: Following the shift in China’s economic policy, from export-driven to domestic consumption-led growth, and a relative slowdown in GDP growth, normalisation in the Chinese cement industry has become a more crucial issue. As previously mentioned, China currently has the greatest excess capacity with 895Mt representing 45% of global overcapacity and, despite recent positive signs in the industry, it is clear there is a still long way for the country to go.
In addition to current market dynamics in the country that encourage/force players to think about domestic or outbound M&As and reduction of idle capacity for efficient resource allocation, we think the central government’s overall policy, pervasive planning and incentives, the governmentlinked investment funds together with the guidance of the national cement association will be the main drivers of the normalisation process through M&As and capacity reduction. The focus on reducing obsolete, inefficient surplus production capacity and optimizing capacity utilization, along with strict environmental concerns, will allow China to provide a cost-competitive product and a cleaner environment for the people of China.
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feature
World cement prices to stabilize in 1Q2018 CW RESEARCH FOB prices for gray cement increased globally in the last quarter of 2017, and are projected to record a general stabilization in the first quarter of 2018, according to the latest update of the Global Cement Trade Price Report (GCTPR) from CW Research 14
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feature
D
uring the fourth quarter of 2017, global average FOB prices increased USD 3.5 per ton or seven percent. This improvement was accompanied by a decline of two percent quarter-onquarter in the volume of cement traded in the markets polled by CW Research. Going forward, trade prices are expected to retreat in the regions of North America and Scandinavia while stabilizing across the remaining regions. To arrive to these figures, CW Research has conducted an assessment on global FOB and ex-work cement prices for the fourth quarter of 2017. That includes domestic demand and export volumes and a qualitative description of the factors driving both demand and prices in each region.
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Domestic demand trends
year-on-year decrease in demand caused by the introduction of new regulations on real estate to protect consumers in the beginning of the year. Most recently, the increase in the petcoke import duty caused pains to the cement manufacturers, the largest consumers of this kind of fuel in the country.
During the first eleven months of 2017, the Indian cement market suffered a 2.6 percent
On the contrary, the United States market witnessed a two percent yearon-year increase in cement demand in the period leading to September 2017, supported by the ongoing recovery at the macroeconomic level and higher spending on the construction sector. Going forward, the new tax reform recently introduced by the country’s legislature – which lowers the liabilities of the construction sector – will likely have a positive impact on demand.
Demand trends varied widely across the globe, with Vietnam, Argentina, and Pakistan experiencing a rapid growth in consumption while consumption slipped by the largest margins in Saudi Arabia, Chile, Thailand, India, and Egypt.
In China, the cement sector has been rocked by government measures that aim at reducing overcapacity and curbing air pollution
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In China, the cement sector has been rocked by government measures that aim at reducing overcapacity and curbing air pollution, which include higher electricity tariffs and limiting production during the peak heating season. This translated into a 0.2-percent year-on-year decrease in production during the January-September
2017 period, which eventually resulted in a shortage of cement that stalled many projects, including key infrastructures from the state, during the month of September. The largest decrease was seen in Saudi Arabia, where cement consumption has been declining for a long time. Last year up to November 2017, demand dropped by 15 percent year-on-year due to due to a slowdown in construction sector rooted in an overall depressed economic state. On top of that, the local government has maintained the 50%-percent export duty on cement imposed in July 2016, further squeezing the options of manufacturers to turn around the overcapacity plaguing the country’s industry. Still, producers are hopeful that 2018 will bring improvements thanks to government incentives and higher infrastructure spending.
Exports trading volumes and prices
In the last quarter of 2017, preliminary data indicates that global trade volumes declined by nine percent year-on-year. In general, the causes for this fall can be attributed to
seasonality factors and the retirement of capacity in some markets. In some major exporting regions in the Mediterranean regions, the volume of exports was negatively impacted by improvements in domestic markets. In Greece, a price hike has been triggered by mounting demand from its main importing markets, such as the United States and the United Kingdom. Input costs have also been a determining factor in the region, as prices have been gradually increasing due to higher electricity and labor costs, especially in Spain. Prices in the region ended the year at USD 52 per ton and are expected to rise by just 0.5 percent quarter-on-quarter during the first quarter of 2018. Likewise, in China, cement makers have also exported much less cement during that quarter due to pressure from the domestic market. Still, the country remained the largest exporter in the world, with twelve percent of the total. Thailand’s exported volumes contracted three percent in 4Q2017, compared to
the same period last year. The exporting scenario is undergoing a mutation, given the fact that major buyers of Thai cement, such as Myanmar and Laos, are increasing their domestic capacity, thus becoming more selfsufficient. During the fourth quarter of 2017 alone, Japan exported around 1.4 million tons of cement, a significant year-on-year increase. Most of it went to Singapore, where rising demand has already propelled Japanese producers to set a new silo, making trade between the two countries a lot easier. As for Turkish exports, there was a slight decline during that quarter. Still, Turkey remained the fourth largest cement exporter at the global level, with a share of nine percent, with most of its exports going to the United States.
FOB prices
Global FOB prices for gray cement have been steadily increasing since February and, in the last quarter of 2017, prices rose across almost every region due to higher input costs coupled with
Regional gray cement export prices outlook (USD/ton)
Source: CW Research
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feature improving macroeconomic conditions in the major economies. In the second half of the year, the average global FOB price went from a recovery in July to falling again in September. Eventually, prices stabilized at an aggregated global average price of USD 60 per ton, with CW Research estimating the FOB price for December at USD 60.1 per ton. Bottom prices have been recovering from very low levels recorded in the beginning of the last year. In January 2017, the cheapest cement stood at USD 31 per ton, but by the fourth quarter, prices were back at USD 36-37 per ton. The cheapest cement comes from markets such as Tu r k e y, Iran,
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South Korea, Vietnam, and Japan, where manufacturers, faced with fierce competition, have been forced to lower their prices. Meanwhile, the upper end of prices has been falling steadily, going from USD 147 to USD 140 per ton between October and November. The most expensive cement normally originates from markets such as Canada, United States, Denmark and Luxembourg.
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Broadly, CW Research expects FOB gray cement prices to remain relatively stable across most of the regions in the fourth quarter of 2018. The most tamed variations will be seen in Asia-PacificJapan and the Mediterranean Basin, with an increase of 0.2 percent and 0.5 percent; and in Eastern Europe, Middle East, and Western Europe, where prices are forecasted to decline 0.1 percent, 0.2 percent, and 0.5 percent, respectively. The exceptions are North America and Caribbean, with a drop of 7.8 percent, followed by Scandinavia and the Baltics,
where prices are expected to slip by 3.9 percent. The biggest increase, of four percent, is expected in China. On the opposite side, India may be looking into a decrease of 10 percent quarter-on-quarter. In Middle East, the marginal quarter-onquarter decline of 0.2 percent will be balanced with a slight recovery yearon-year. With the export duty imposed by the Saudi government on local producers, neighboring countries have been deprived of Saudi cement, and other suppliers such as Iran and the UAE have not yet met that demand, leading to higher prices.
Ex-Works Prices
While some markets like Brazil, Egypt, and Saudi Arabia remain under pressure, the major markets across the globe have experienced an improvement in their ex-works cement prices. The reason for that increase can be found in the depreciation of the US dollar against the
In the second half of the year, the average global FOB price went from a recovery in July to falling again in September
local currencies, higher input costs with power and raw materials, and strong activity in the construction sector. Europe showed a strong increase in prices, but that was mainly artificial, caused by the strength of the Euro against the US dollar. The exceptions
were Italy and France, where prices have been rising, even when looking at the local currency. Going forward, strong demand is expected to have an uplifting effect in the prices of the region. In the United States, the outlook is similarly positive, with CW Research expecting an increase of seven percent year-onyear on ex-works prices thanks to strong construction activity, particularly in the states of Texas and California. Going forward, in Western Europe, prices are expected to marginally fall by around USD 0.4 per ton or 0.5 percent quarter-on-quarter. This will be caused unusually low demand in winter months after prices increased in the fourth quarter thanks to a rise in input costs and higher demand in some markets, such as France and Germany. In Southeast Asia, there were stout pressures driving prices downward
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feature during 2017. The situation was partly reversed in the fourth quarter thanks to countries like Indonesia, where higherthan-expected growth in demand led to companies calming down their efforts to export at any price solely to avert the negative impact of overcapacity. The devaluation of the US dollar is creating problems for Thailand’s cement sector. While the price of Thai cement has been artificially rising in US dollars, making it harder for the country to export the commodity, in the local currency the price of cement has actually fallen. For Latin America, price trends have been mixed. Mexico and Argentina led the region with a surge in prices, in the case of the latter caused by large infrastructure projects. In Mexico, CW Research expects a 0.5 percent quarter-on-quarter increase in the first quarter of 2018. Despite a significant year-on-year expansion of ex-works pricing in the third quarter
of 2017, which led to the voicing of concerns from the construction developers, cement prices softened in order to avoid end-users resorting to importing cement. Nonetheless, production costs are still being affected by rising fuel costs, a scenario expected
Broadly, CW Research expects FOB gray cement prices to remain relatively stable across most of the regions in the fourth quarter of 2018
to continue in 2018. In the other side of the scale, Brazil remained embroiled in an economic crisis and weighted down the average price of the region in spite of a small resurgence in the third quarter. The Chilean cement market is also currently experiencing a turnaround, after the domestic economy jumpstarted in November, propelled by the manufacturing and mining sectors, resulting in a 14-percent year-on-year increase in cement consumption. A recovery in Egypt is driving the regional average up, even if prices in the country are still far from those seen in the past years. However, due to the stabilization and inflation in the country, CW expects a recovery and a price rise to happen in the following quarter. For Saudi Arabia, the large
Ex-works prices in select markets in 4Q2017
-20%-20% to -14% -14% to -9% -9% to -3% -3% to 3% 3% to 9% 9% to 14% 14% to 20% 20%+
Note: *Cement demand was estimated based on cement production trends. Source: CW Research
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clinker stocks that have been accumulated due to low demand in the previous quarter continue to be a major burden for the cement sector. For now, it is still unclear when local cement manufacturers will be able to turn around from overcapacity. During the fourth quarter of 2017, the largest increase in ex-works cement prices was seen in China, where an improvement of 36 percent was caused by a mixture of government measures to control smog and overcapacity that generated clinker and cement shortages. CW Research foresees a further increase of 16.3 percent in the first quarter of 2018, as measures to curb pollution remain in place until March 15. Then, as clinker and cement shortages become less problematic, exworks prices are expected to fall back in the second quarter.
CONCLUSION
Both FOB and ex-works cement prices have had a positive development in the fourth quarter. Across most regions, higher prices were a consequence of growing demand and costlier inputs. For ex-work prices, the devaluation of the US dollar has been a preponderant factor for the increase, together with the more expensive inputs and an acceleration in the construction sector. Going forward, the forecast presented by CW Research shows different trends for the two sets of prices. The average global FOB price for cement is expected to either remain stable or, in the case of North America and Scandinavia, decline. As for exworks prices, trends are also dependent on the region, but there is a strong possibility of further increases in markets such as China, Western Europe, and the United States.
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 go to source for monthly price data for about 60 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.
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 +40-744-67-44-11, or e-mail at ld@cwgrp.com.
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Country Snapshot: Nepal
cw research
Moving Mountains:
Nepal’s climbing
cement market
The Nepalese cement industry is poised to attract investors’ attention and exceed 10 million tons of cement demand per year by 2023, amidst a background of regulatory and infrastructure hindrances 22
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Country Snapshot: Nepal espite being fragmented and plagued by bureaucratic and clinker transportation issues, the Nepalese cement industry is expected to rise on construction, transportation and energy infrastructure projects, which are vital to help rebuild the country after the devastating earthquake of 2015. According to CW Research, apparent cement consumption in the country increased at an annual average rate of 8.1 percent to 6.1 million tons of cement in 2017, while per capita cement consumption rose by 6.8 percent to 208 kg in the 2012 – 2017 period. In Nepal, cement demand tends to be seasonal and peak in the period between May to October. Consumption has been driven by investments in large hydroelectricity projects, as well as in road and housing. Small-scale consumption of cement by
individual households is also critical in Nepal, especially for small-production capacity manufacturers, who mostly target this segment through a competitive pricing strategy.
Construction sector still constrained by bureaucracy
The Nepalese economy has gone through several highs and lows, having been impacted by natural disasters, political instability and protests. Due to its geographical position, Nepal also acts as a
Cement consumption has been driven by investments in large hydroelectricity projects, as well as in road and housing
buffer between India and China, and their geopolitical policies and strategies often affect the country’s economy. Domestically, important construction projects that would lead to a large improvement in cement demand continue to be bottlenecked by bureaucratic issues, and are often entangled in geopolitical tensions, leaving cement manufacturers and exporters alike frustrated with the pace of development in Nepal. Investors in the Nepalese construction sector are mostly focused on power generation infrastructure, namely in dam construction, as investors around the world plan to tap on the country’s large hydropower electricity potential. The tourism and the dam construction sectors are the largest drivers of Nepal’s construction sector. More than two years after the devastating earthquake of 2015, little progress has been made in terms of housing reconstruction, as the price hikes in the wake of the earthquake have left little options for the government and for home owners.
ChART: APPARENT CEMENT DEMAND AND PRODUCTION (2012-2017) (mm tons)
Source: CW Research
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A splintered and hampered industry The Nepalese cement market is highly fragmented and unconsolidated, dominated by a myriad of small and medium producers lacking plans for major expansions. There are a total of fifty plants manufacturing cement, half of which are grinding ones, and the other half are integrated ones, with a total cement capacity of 8.7 million tons per year (2017E). Cement plants have difficulties in running at stable utilization rates due to frequent power, fuel and raw material shortages. In 2017, CW Research estimates that the cement industry’s utilization rate was 70%. Another obstacle is the persisting lack of regulatory approval to market high quality cement. Most cement manufacturers operating grinding plants are based close to the border with India, which enables them, under normal political and market conditions, to import clinker easily and without hurtful delays caused by poor infrastructure. Towards the end of 2017, and still at the beginning of 2018, Nepalese cement manufacturers struggled with clinker shortages as problems on the Indian border (Raxaul-Birgunj) prevented the transportation of clinker. On December 22, 2017, clinker supply through the border
Nepal
to Nepal came at a standstill as local residents from the Indian side protested the impact clinker transportation has on air pollution and overall health. As a landlocked country, transport of clinker is conditioned by land infrastructure. As such, it is constrained by poor road infrastructure, often going through human settlements. Since December 22 2017, thirteen cement factories across the Parsa- Bara corridor have been left with zero clinker supply, forced to operate under designed capacity using small amounts of clinker already in stock. If the situation persists, not only will cement prices skyrocket, as they have since December 2017, but manufacturers will be forced to stop operating and be mothballed. Difficulties in transporting cement in the country due to the very poor quality of the roads
Kathmandu
also pressures local manufacturers, who often have no other choice than to limit their supply capability within a 100km radius. Nepal also has large amounts of limestone reserved that remain untapped. One of the obstructing factors is poor connection to limestone reserves, as they are usually located at a considerable distance from consumption centers. Investors with the financial capability of investing in creating their own infrastructure are the only ones who, at the moment, can take advantage of the situation. The Nepalese cement market is a price-driven one, with the end user having limited purchase criteria in regards to quality considerations. Small-scale plants mostly cater cement to individual households, which decide on their supplier on pricing considerations only.
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Country Snapshot: Nepal
Chart: Baseline and new capacity (mm tons)
Source: CW Research
A sought-after market Despite all the troubles the market faces, new manufacturers crowd for a place at the table. Demand from small-sized consumers remains ripe, and it is the main driver of demand in the country. Promises of finding a resolution to the cement quality regulation issue also act as an incentive to manufacturers. If the issue is resolved, the large, cement-intensive construction projects could be accessible to local cement manufacturers. Three large companies announced their entry on the market: the Chinese Huaxin Cement and Hongshi Cement (in partnership with a local company), as well as Dangote Cement. The latter, however, has been technically
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Difficulties in transporting cement due to the very poor quality of the roads also pressures local manufacturers disqualified for the detailed exploration of three limestone mines after the company did not provide sufficient information on technicalities. Up until
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the start of 2018, Dangote had planned to mine at three locations to provide raw materials for a 6,000 tons per day cement plant. Two of the mines Dangote had hoped to gain rights over were recently won by Huaxin Cement. Critics claim that the current government’s Chinese affiliation might have tipped the scale towards the final decision. By 2023, cement demand in Nepal is expected to exceed 10 million tons per year. CW Research expects the stabilizing political environment, coupled with pressure from the population to complete vital construction, transportation and energy infrastructure projects, will further accelerate the upward trend in domestic cement consumption.
About the report The Nepal Cement Market Report, part of CW Research’s Cement Industry Country Report series, meets the country-level cement market research needs of small and large businesses, analysts and governments. The reports cover cement volume trends in detail, analyzing trade flows, cement demand and production (historical and a fiveyear outlook), per capita consumption, and the competitive landscape, including company profiles, cement production facility details, including past and announced brownfield production increases and greenfield projects. Cement Industry Country Reports also cover demand drivers, including macroeconomic and construction sector dynamics, for the specific country. Industry reports are presented in an objective, easy-to-understand format, providing hard-to-find answers to top market research questions. More information about India petcoke CFR price assessments can be found here: https://www.cwgrp. com/research/research-products/ product/238-nepal-cement-marketforecast-through-2022 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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insight analysis
How far will
Indian cement go without petcoke? India’s cement industry is highly reliant on petcoke, but a recent ban on the use of the fuel around Delhi has raised concerns about a country-wide ban, and is forcing companies to seek costlier alternatives.
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insight analysis he Supreme Court of India banned the use of petcoke, a solid petroleum byproduct, in the National Capital Region (NCR) starting November 1 of 2017, due to a series of complaints and concerns about the state of air quality around Delhi and other major industry-heavy Indian cities. The NCR, which is comprised of the states of Haryana, Uttar Pradesh and Rajasthan, and located around the city of Delhi, is home to several cement plants as well as other industries which relied on petcoke until the ban. Companies were given very little time to adjust to the new rules, as the new regulation came out in October 24 of 2017, and by January 20 of 2018, there were imposed restrictions on its import to the NCR. However, the court later allowed the cement industry to use petcoke, so long as it was used in the manufacturing process instead of power production.
content; and its use was virtually unregulated. However, these same qualities led to its downfall: the low price drove to a surge in demand prompted by Indian buyers, which led the fuel to already surpass the USD 100 per ton mark and surpass coal prices. Its higher calorific content meant that it required a much smaller quantity to produce the same amount of energy as coal, therefore making it more cost-effective. Even with the recent spike in petcoke prices, several companies continued to purchase the fuel, as the necessary amount was always inferior to that of coal.
Cement companies are considering the switch to imported coal despite the likely increase in costs
A matter of power
Petcoke had a lot going for it when compared to coal: it was cheap; it had a higher calorific
However, this also means that the fuel’s emissions are superior when compared to coal, with the Carnegie–Tsinghua Center for Global Policy claiming that burning petcoke releases eleven percent more greenhouse gases than coal. Meanwhile, the Indian Environmental Pollution Control Authority says that petcoke contains seventeen times more fuel than the limit set for coal. The lack of regulation was what enabled petcoke imports to India to expand by more than twenty times from 2010 to 2016, when a whopping fourteen million tons of the petroleum byproduct were shipped to the country, mostly sourced from the United States. But as the capital struggled to breathe clean air, lung diseases skyrocketed, acid rains became more frequent, and smog permanently clouded the city, activists began to notice and initiated campaigns to push further regulations on industries. Some of these targeted fuel use, which included petcoke. As pollution levels in Delhi hit a new dangerous high, the court reacted by imposing the ban with a short period of notice, which harmed several small industries, which are incapable of modifying their equipment for other intakes or to comply with the newly imposed regulations.
To burn or not to burn
Despite the NCR ban worrying the cement industry, most of its players were safe, as their manufacturing businesses are located away from the targeted area. Still, there was a concerted effort from the sector to appeal
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to the court regarding this decision, and by December 13, the Supreme Court decided to allow cement makers to burn the fuel, so long as they were using it as a feedstock for the production of cement, rather than a power generation fuel. Several players are still fearful that this precedent will lead to a country-wide ban, and the Supreme Court has been studying the option, which means that a pan-India petcoke ban could soon be a reality; the import tax for the byproduct was already upped from 2.5 percent to ten percent in December 15. Despite the already high prices of imported petcoke, domestic refiners have also upped their pricing in order to keep up with the new reality of the market; demand is still up and supplies will only continue to tighten when Reliance’s petcoke gasification project initiates, expectedly in the first half of 2018. Some companies have already started to ditch petcoke altogether in favor of coal, and it is estimated that India’s coal imports reached eighteen million tons in October 2017, the first time since the middle of 2016. So far, this provides a
challenge, as it is estimated that in order to replace fourteen million tons of petcoke per year, around 24 to 31 million tons of coal would be necessary. Imported coal prices are also high due to Chinese cuts in output, and Indian companies seem to be moving especially towards Indonesian thermal coal.
Prices and offers for both domestic and imported petcoke are still on the rise Domestic coal, despite being a popular option, has several issues with its supply. Even though production is high, demand is even higher, and Coal India and its subsidiaries are unable to keep up with the demand. Therefore, this remains a less popular solution, although procurements for the fuel are particularly strong in areas near to mines and with a good transport network. Most recently, in January 2018, the Supreme Court has restricted the import of petcoke to the NCR, only allowing “consented and registered industrial units of NCR States” to directly import petcoke. As per this new regulation, cement plants are required to obtain permission from the state pollution
control board in order to continue operations, and industrial units allowed to use petcoke would not be allowed to keep more than three months’ need in storage.
The clouded future
The industry is nervously awaiting a Supreme Court decision on whether petcoke will be effectively banned across the country, or if only the approximately 2.2 million tons per year of estimated consumption in the NCR will be removed. This decision is expected in February, and judging by the Court’s recent moves in regards to the fuel, users have a right to be concerned. The government is also allowing each state to decide on the matter of whether or not they should prohibit the use of the fuel, while a federal-level decision is still being discussed. New regulations are also expected after the Supreme Court imposed a fine of INR two lakh on the Ministry of the Environment for not fixing any emission standards for industries using petcoke in the NCR, which prompted the government to be more proactive and set more standards for industries. As one of the top consumers of petcoke, there are concerns if India were to fully replace its petcoke intake for coal in an already tight market; however, as the industry is still allowed to use petcoke in its manufacturing process, several doubts remain regarding the future use of the fuel.
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CEMENT MARKETS
CW Research
Cement Volumes
Saudi Arabia’s cement production faced a decrease of 14.8 percent and 16.5 percent year-to-date decline in production to November, due to the continuing slowdown of the domestic construction industry.
Indian cement production decreased 3.6 percent year-to-date until November, due to the latest hike in the import duty on petcoke to 10 percent. The cement industry is the largest user of petcoke in the country. Additionally, contrary to the first half of the year, housing and infrastructure construction activity was less intense due to new regulations to ensure better home buyer protections, alongside with a shortage of sand, and political instability, causing a cement price hike of five percent. On the back of the continuing recovery of the economy, as well as of growing residential and infrastructure construction, cement demand in the United States rose by two percent yearto-date in September. Spending directed towards the infrastructure sector, though not as significant as private spending for residential projects, has also helped sustain the growth of cement demand in the United States. The government also plans to reduce taxes in the construction sector, thus potentially giving the cement industry a boost. Saudi Arabia’s cement production faced a decrease of 14.8 percent and 16.5 percent yearto-date decline in production to November, due to the continuing slowdown of the domestic construction industry. The collapse of oil prices brought construction projects to an end, and major contractors to the edge of insolvency. In addition, the government continues to maintain the export tax of 50 percent implemented in July 2016. Nonetheless, the cement industry
expects to grow in 2018, thanks to the incentives of the government to increase spending in construction companies and basic materials. The Chinese government’s environmental sustainability effort shave led to a cement output cut, materializing into a decrease of cement production by 0.2 percent year-to-date up until November. A supply shortage of cement since September generated an increase of concrete prices, as well as suspensions on construction projects, including key governmental projects, due to disorderly price spikes and artificial supply shortages of raw materials. The government has gradually imposed administrative constraints on the supply side of cement production through such measures as shifting production to the peak, raising electricity prices and further strengthening environmental protection. Cement demand decreased by 3.4 percent year-to-date to August 2017 in Greece. The country’s still fragile economy remains particularly burdened by growing public debt. Although an expansion of the construction sector was noticeable in the first half of the year, major public construction investments are set to begin only in 2018, giving muchneeded confidence to cement manufacturers. With demand continuing to trend negatively, cement producers have resorted to a more aggressive exporting strategy during the year. An additional aggravating factor for cement production was the increase of energy costs for domestic cement industries.
CHART: Year-to-Date Cement Demand (%) Sep-17
Oct-17
Nov-17
Sources: CW Research
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CW Research
Cement demand increased 8.8 percent year-todate in Indonesia until November. Growth was favored by public and private sector investments in residential construction projects, both low income affordable housing and tourism-related buildings. Government investments to develop the country's infrastructure also supported the growth in cement demand. The government plans on further improving the country’s transport infrastructure in order to boost its tourism sector, one of the largest revenue sources for Indonesia. Moreover, fiscal stimulus also encouraged the constructor sector and the infrastructure projects. Egyptian cement demand decreased 2.2% year-to-date until September while cement production increased 0.1% for the same period, as the country faced a decline in the
CEMENT MARKETS
Pakistan’s cement demand experienced a yearto-date increase of 14.2 percent to November 2017. The steady growth of domestic demand, in spite of smaller export quantities, has persuaded major cement companies to add new production lines that will enable them to better capture the market. The government also expects to finish under construction or planned projects until next year, as part of the Public Sector Development Programme (PSDP) and China Pakistan Economic Corridor (CPEC) investments. The projects are expected to continue to absorb large amounts of cement. As peace and order in the country improved, the real estate sector is facing a major recovery compared to the previous years, allowing demand for cement to increase.
real estate activity, which slowed the demand for construction materials. The production of cement was higher than actual domestic demand, leading to a large excess of product. The government is seeking foreign investments for large infrastructure projects. Funds from Egyptian partners are expected to be invested in 2018, targeting construction and industrial sectors, as well as the electricity sector, giving confidence to cement manufacturers for 2018. Vietnam’s developing economy recorded the biggest increase in the last 10 years, driven mostly by increases in industrial output, reflecting arise of cement domestic demand and production by 12.1 percent year-to-date until November. Cement prices decreased driven by a surplus of cement production. Exports recorded an even larger increase when compared to demand after the government announced its intentions to reduce export taxes and provide financial aid to the cement industry, and to absorb the surplus of cement production. Turkish cement demand increased 2.6 percent year-to date to August 2017, due to the fast recovery of investments made by the government in the infrastructure and home building sectors. Apart from the boost provided by domestic demand, exports of cement also contributed to rising production levels, especially because cement prices decreased, making Turkish cement very competitive, compared to other European countries. Political issues that have hindered more substantial growth at the beginning of the year now seem to be in the past.
Cement demand increased 8.8 percent year-todate in Indonesia until November. Growth was favored by public and private sector investments in residential construction projects, both low income affordable housing and tourism-related buildings.
CHART: Year-to-Date Cement Production (%)
Sources: CW Research
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cement PEOPLE
P
eople
Djamari Chaniago exits Semen Indonesia Djamari Chaniago is leaving his post of independent commissioner at Semen Indonesia. Chaniago has presented his resignation letter to the company, which will be reviewed in a general meeting of shareholders that will be scheduled later. He became a commissioner at Semen Indonesia in 2016 and his term was supposed to end in 2021. Apart from his post at Semen Indonesia, Chaniago is also president commissioner of Semen Padang.
FLSmidth appoints new machinery division director Jan Kjærsgaard was picked as the new director for FLSmidth’s machinery division, responsible for the sale of several kinds of equipment to the company’s customers.
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Kjærsgaard comes from the post at Bladt Industries, a supplier structures, to replace Bjarne Hansen. His nomination will effect on March 1, 2018.
of CEO of steel Moltke become
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The “Cement and Clinker Price Assessment� product series is a monthly price marker which offers prompt cargo (next 30-60 day deliveries) pricing insights, monthly updates for prices, cement market news and an overview of key developments that are crucial for those involved in the cement and clinker trade. The monthly updates cover distinct price markers: Mediterranean Basin
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Cement and clinker price assessments
cement orders & equipment
O
rders & equipment
Star Cement finds improved efficiency on new steel parts Star Cement claims improvement in efficiency by switching from mild steel to SSAB steel. The cement maker, responsible for a cement plant in Ras-al-Khaimah (UAE), has switched from mild steel to Hardow Wear Plate steel grades from SSAB, resulting in a decrease of downtime by 42 percent. Velayuthan, general manager at Star Cement, says that with mild steel the pieces had to be replaced every two to three months. Now, with
the new steel grades, the company is able to operate 330 days with stoppages. Coupled with other improvements,
the switch has led to an increase in the capacity of the plant from 6,800 to 8,300 tons of cement per day.
LOESCHE commissions LM 35.2+2 CS mill at Sri Balaha Chemicals The LOESCHE cement mill LM 35.2 +2 S is successfully operating at Sri Balaha Chemicals, Hindupur, producing Granulated Ground Blast Furnace Slag (GGBFS) of 4,000 cm²/gm at 50 t/h. It was supplied in 2016 and installed and commissioned by March, 2017. The mill achieved the rated capacity within 2 weeks of commissioning and achieved exceptional operational parameters with a throughput increase of the mill and a reduction in the specific power consumption. LOESCHE has the patented concept which enables the production of cement with higher Blaine and effective grinding of blast furnace slag. LOESCHE has
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supplied more than 365 mills worldwide for producing various types of cement such as OPC, PPC, composite cement, as per international standards.
India Cement and Construction Materials Journal
With the stability in operation and high grinding efficiency, LOESCHE has commissioned over 2,200 mills worldwide.
ABB to provide integrated automation and electrical systems for Emami Cement
Emami Cement ordered an automation and electrical system for its new plant in Odisha. ABB India was requested by Emami Cement to install an automation and electrical system at its new cement plant in the state of Odisha. The factory, a flagship project for Emami Group, will have the capacity to produce two million tons of cement per annum. Emami wants its new project to have advanced equipment and high levels of energy efficiency. It hopes to capitalize with an increase in demand for cement with the infrastructure expenditure coming in the next years. The new system promises to reduce energy consumption and improve the overall performance of the mine. ABB will set in place 800xA electrical distribution and distributed control system that will monitor, control, and optimize the production process.
LOESCHE to supply Penna Cement with vertical roller mill LOESCHE has won an order from Penna Cement Industries Limited, India. The vertical roller mill is to be used at the cement plant in Boyareddypalli (in the state of Andhra Pradesh), around 200 km north of Bangalore. There the vertical roller mill equipped with four rollers will grind petcoke with a throughput capacity of 52 t/h, 3% R on 90 Îźm. The delivery of the order to be managed by LOESCHE India is to take place at the beginning of next year. In addition to the positive experience that Penna Cement had with a similar vertical roller mill, the easy maintenance of the grinding plant was a decisive factor in the award of the order. Founded in 1991 and commissioned in 1994, Penna Cement Industries is one of the largest cement manufacturers in India with a production capacity of seven million tons per year. The family-run company is primarily active in the expanding south and
west of the country. As a result of positive market developments, Penna Cement now wants to increase the production capacity
at the cement plant erected in 2008 in Boyareddypalli from 2 million to 4.6 million tons of cement per year.
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cement Regional news
R
egional news
Cement sales increase in Indonesia, 2017 Cement demand rose in Indonesia during 2017. During the year, around 66.4 million tons of cement were sold domestically, an increase of 7.8 percent compared to the just 62 million tons sold during the year before, revealed the Indonesia Cement Industry Association. Meanwhile, exports soared by 84 percent reaching 2.95 million tons. Thus, overall sales by Indonesian cement manufacturers ended the year at 69.37 million tons, an increase of 9.7 percent compared to 63.61 million tons in 2016. According to Widodo Santoso, president of the association, cement demand increased thanks to a rapid growth in the infrastructure sector, which included projects such as new roads, bridges, irrigation systems, ports, and airports.
Shree Cement opens new grinding unit A new grinding unit, called Bangur Cement, was launched by Shree Cement in the village of Rohi Udaipur Udasar, Sriganganagar District. The new unit will have the capacity to produce 3.6 million tons of cement per annum. Shree Cement has rapidly increased its production capacity,
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multiplying it by four in the last five years. Going forward, Shree Cement wishes to further expand its output from 26 million to 40 million tons per annum until fiscal year 2020. Its activities are currently concentrated in the north, where it has 60 percent of its capacity, followed by the East with 22 percent.
Cement ouptut expected to decline in Iran
Dalmia Bharat places highest bid on Binanin Cement A consortium led by Dalmia Bharat, backed by Bain Capital and Piramal Enterprises, has placed the highest bid on insolvent Binani Cement, offering INR 63 billion for the company, thus beating UltraTech Cement, whose bid went above INR 62 billion.
Still, Dalmia Bharat’s bid is not yet considered the best offer, as UltraTech has beaten the consortium in other evaluation criteria. UltraTech is said to have offered a 20 percent stake on Binani Cement to its creditors. Both companies have refused to comment on the outcome of the bidding process for now.
Cement production in the country is expected to decline. A research center associated with the Iranian parliament expects cement production to decrease from 34 million tons in 1395 of the Iranian Calendar (corresponding to 2015-16 AD) to 33 million tons in 1396. Between the two years, domestic demand is expected to remain stable at 29 million tons, while exports are projected to decline from eight million to seven million tons. Production has been falling since 1391. Iran exports cement to 34 countries, including Iraq, Afghanistan, Kuwait, and Pakistan. However, Iraq used to account for 60 percent of the exports, until it imposed anti-dumping regulations that limited the flow of Iranian cement into the country.
Cement sector remains strong in Pakistan Pakistan’s cement sector remains solid and looks prepared to eventual decrease in prices. In the first seven months of the Pakistan fiscal year, corresponding to July 2017 to January 2018, cement demand grew by 20 percent compared to the same period a year before. In the past month alone, demand soared by 10 percent month-onmonth and 37 percent year-on-year.
Vietnam's cement export prices increase The price of cement exported from Vietnam improved during the past year. According to figures from the Vietnam Cement Association, the price of cement and clinker exports had increased by USD 5 to USD 7 per ton by the end of 2017. Based on the fact that China is prepared to maintain its tight policy on new clinker and cement capacity, the association believes that the positive trend will extend itself during February.
The domestic construction industry is absorbing most of the output, while exports continue to fall and new plants are commissioned. However, the sector must be prepared to a decrease in the average prices as new capacity becomes operational. Cement makers are likely well prepared to face some price slump thanks to good results achieved in the past years. In FY2016, the top 7-8 produces of cement posted margins of 40 to 48 percent.
Still, the sector has been making pleas with the government for measures to improve competitiveness in the export market and for anti-dumping duties on cheaper Iranian cement.
Another factor benefitting Vietnamese cement companies on their export endeavors is the end of the export duty on cement, a move that is expected to increase the competitiveness of those players in the foreign market.
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Flashback NEWS FLOW IN CEMWEEK.COM LAST TWO MONTHS (darker blue shows higher news volume)
Russia
22 articles
Pakistan
China
27 articles
United States 24 articles
Egypt
40 articles
44 articles
Nepal
18 articles
Bangladesh 13 articles
Indonesia 21 articles
Brazil
11 articles
Higher news volume Lower news volume
cw group agenda / reports The CW Group 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 group meeting agenda include:
Cw research newest reportS:
March 15, 2018
Global Cement Volumes Forecast Report: 1H2018 update and outlook
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April 26, 2018
Global Cement Ex-Works and Trade Prices – 1Q 2018
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February/March 2018
Nepal Cement Market Report
Global Cement Volume Forecast ReporT
Global Cement Trade Price Report
February 2018
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India Cement and Construction Materials Journal
BUZZ
economic
products
slag
ministry
waste
global portland
materials
concrete
exports
growth
1h2016
imports russia
results
industrial activity
1.
UltraTech, Dalmia Bharat leading Binani Cement auction 2. India’s National Green Tribunal asks states for fly ash action plan 3. UltraTech Cement to set up plant in Madhya Pradesh 4. JSW Cement makes highest bid for Binani 5. MP Birla secures forest land for new cement plant 6. Cement prices increase in India, January 2018 7. Binani Cement bidders allowed to improve their offers 8. Shree Cement posts net profit in 3QFY2018 9. India's Star Cement secures state subsidy 10. Shree Cement buys Union Cement, from UAE
using
output
materials results
investment
INDIA
region economic development
sold
coke
recorded
power reach
short thermal volume
IRAN
large
paid
industrial
FACTORY
produce
refinery
decline exports
exports consumption crore
waste
products
recorded
IRAN
India: ACC Cement says petcoke ban won’t derail its operations 2. Indian refiners expecting challenging 2018 3. Power producers study new Coal India price table 4. India: Petcoke import banned in Delhi and National Capital Region 5. National Cement focus on cost cutting, efficiency 6. Lipetskcement with higher output in 2017 7. Thermal coal prices reach new high in China 8. China’s aluminum output expands in December 9. Lafarge Cement Hungary with higher output in 2017 10. UltraTech reports lower net profit, 3QFY2017
petroleum
vietnam
produce
1.
imports
LAFARGE
increased
decline
Cement plant equipment market to reach USD 9.0bn by 2022 2. French start-up launches new cement grinding unit in May 3. St Marys cement plant is shutting down 4. New cement plant to open in Beni Suef, Egypt 5. Expansion of Cement Cruz Azul suspended 6. Dangote Cement expects lower volume of sale 7. Cement plant in Antioquia, Colombia affected by fire 8. Italcementi acquires Cementir Italia 9. Cementos Molins buys Holcim Cement Bangladesh 10. New white cement project in Novgorod, Russia
TOP petcokeweek STORIES
saudi
india
1.
imports
product
official
GLOBAL
lafargeholcim short
GRANITE
seeks
imports
region results
india
TOP BMWeek.com STORIES 1.
India’s National Green Tribunal asks states for fly ash action plan 2. Sika and Saint Gobain takeover battle could end soon 3. Lafarge Canada sets new alternative fuel pilot project 4. Wienerberger expands its range with a clay paver 5. India's JSW Cement to benefit from JSW Steel deal 6. US builders anticipate a challenging 2018 7. Russia developing new concrete facility 8. US’s infrastructure spending to rise 9. Construction industry growth slows in December 10. Construction demand to rise in Singapore in 2018
India Cement and Construction Materials Journal
February/March 2018
41
The industry's go-to world
cement market forecast report and outlook
GLOBAL CEMENT VOLUME FORECAST REPORT The Global Cement Volume Forecast Report (GCVFR) is a twice-yearly, data-oriented forecast report, providing extensive details on the global outlook as well as key cement markets worldwide. The benchmark report provides a five-year outlook on cement consumption, production, net-trade, cement production capacity and other key cement metrics that decision makers cannot live without. The GCVFR is built with investment-grade analytical rigor, informing industry professionals about what is expected around the corner for world cement markets. visit: http://goo.gl/eib8fE Our global presence: Greenwich (US) • Mumbai (IN) • Porto (PT) • Bucharest (RO) • Sao Paulo (BR)
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