Oficemen downgrades growth forecast

Cement producers have reduced their growth forecast for 2018 from 12 per cent to seven per cent, according to Oficemen, Spain’s cement association.

They attribute the lower growth rate to the economic slowdown and “paralysis” that governs the execution of public work. The extra demand generated by new housing is unable to offset the lower civil works activity, which accounts for the majority of cement consumption, according to the association. The construction of flats now accounts for 28 per cent of cement demand, up from 22 per cent a decade ago. However, cement demand from large infrastructure projects has seen its share shrink from 60 per cent to 52 per cent over the same period.

In addition to the domestic forecast, Oficemen highlights the 10 per cent fall in exports between June 2017 and June 2018, which it attributes to the deteriorating competitiveness of Spanish cement producers, who have seen electricity costs rise by an estimated 20 per cent in 2018. In addition, the association said that the price of CO₂ emission rights in Spain has tripled since the start of the year and is now almost EUR25/t of cement.

Cement plants in Spain are currently operating at around 50 per cent of capacity with a stagnant output of around 20Mta since 2013, says Oficemen. "Therefore, the uncertainty and concern for our industry is maintained," said Oficemen President, Jesus Ortiz Used.