The US Department of Commerce Thursday lowered tariffs on imports of grey portland cement and clinker by Mexico’s Cemex SA (CX) from 54.97 per cent to 42.26 per cent, slightly higher than the 40.54 per cent preliminary result released in August. "The department has found the weighted-average margin for Cemex and its affiliate GCC Cemento in this review to be 42.26 per cent," the department said in a statement. This translates into a per-unit rate of US$26.28 per metric ton. Shares of Cemex, the world’s third-largest cement producer, were down 1.4 per cent at US$62.93 shortly after the announcement.
The review is separate from ongoing negotiations that have been taking place since mid-2004 and may erase cement duties altogether. On Wednesday, Mexican Economy Minister Sergio Garcia de Alba said the talks to settle the 15-year-old dispute over cement import duties are "very advanced," and that an agreement could be announced in coming weeks. This is the 14th administrative review of tariffs on Mexican cement since the duties were established in 1990.
US builders have decried the tariffs and pointed to a shortage of cement in the US as a reason to do away with the duties. According to a UBS Investment Research report, lower tariffs could help Cemex offer some 3Mt to 4Mt of cement from plants in northern Mexico, which would mainly substitute more expensive US imports from Asia. The news is positive for Cemex shares, but the "fundamental impact is relatively limited," UBS said.
