Spanish demand sees largest drop for over 70 years

Cement consumption in Spain has seen its full-year figures for 2012 fall even further than the pessimistic forecasts predicted by Oficemen in December. Last year, cement demand contracted 34 per cent YoY to 13.5Mt, representing the largest decline in the Spanish cement market’s history for several decades. Only in 1936 a larger drop was found. Full-year output figures registered a fall of just under 29 per cent to 22.18Mt.

“We face data that are really symptomatic of the poor state of health of the Spanish cement market and given the current declines in consumption, a recovery is further away than the current forecast horizon. And the worst is that as of today, we expect a drop of nearly 20 per cent in 2013,” explained Oficemen CEO, Aniceto Zaragoza.

While December is traditionally the month of the lowest cement consumption in the country, demand fared worse than expected. With a drop of 37 per cent, consumption stood at 762,671t – a level not seen since the 1960s. Output also declined, by 30 per cent to 919,580t.

Spanish cement producers are not only having a hard time in their domestic market. Their export capacity is being eroded by higher energy costs, which in turn affects their competitiveness in comparison with cement makers from neighbouring countries. In 2012, they exported 5.9Mt of cement, less than half of the country’s 13Mt cement exports in 1983. However, imports also fell by 50 per cent to barely 0.5Mt.