Cemex released its 2019 20F annual report this week, which highlights a significant fall in cement volumes in the company's domestic market of Mexico before the impact of COVID-19. While the US markets held up well in 2019 and Europe saw strong infractructure investment, it is not known how quickly the recovery will occur after the pandemic and Cemex expects all markets to be affected to varying degrees.

Mexico
Cemex's domestic cement sales volumes in Mexico fell by 15 per cent in 2019 compared to 2018 and ready-mix sales dipped by 14 per cent. The decrease in sales volumes is attributed to muted public and private investment in a government transition year as well as delays and suspensions of building and commercial projects. The commercial sector with tourism-related projects in particular was the main driver of demand in 2019. Exports represented nine per cent of the group's Mexican production volumes, an increase of 22 per cent compared to 2018. The USA was the biggest market accounting for 67 per cent of exports. Average cement prices in Mexico for the company rose by two per cent and by three per cent in ready-mix sales.

USA
In the USA domestic cement sales for the company fell by two per cent in 2019 compared to 2018. Cemex's ready-mix sales in the US rose by two per cent in 2019 compared with 2018. The decrease in domestic cement sales volumes was due to unfavourable weather in some key states, coupled with the weak residential performance in 1H19. The cement prices in the USA on average increased by four per cent for Cemex's operations and ready-mix prices rose by three per cent.

Europe
European revenue represented 21 per cent of earnings for the group. Infrastructure was the main driver with multi-year projects in UK, Germany, Poland and France, plus favourable residential building in Spain, Poland, Germany and the Czech Republic.

UK cement sales volumes slipped by three per cent for the group in 2019 compared to the previous year. Ready-mix sales fell by one per cent over the same period. Decreases in ready-mix and aggregates were attributed to uncertainties around Brexit. Cement prices rose on average by three per cent during 2019 and ready-mix prices rose by one per cent.

French ready-mix volumes for Cemex increased by one per cent in 2019 compared to 2018 and were helped by demand from the 'Grand Paris' project as well as demand from the industrial and commercial sectors. Cemex’s ready-mix prices in France on average rose by three per cent in 2019.

German domestic cement sales for Cemex rose by one per cent in 2019 compared to 2019, while ready-mix sales increased by six per cent. Infrastructure was the main contributor to demand and favourable activity was seen in residential and in the industrial and commercial sectors. Cement exports increased by 11 per cent in 2019 compared to 2018. Average sales prices of cement rose by five per cent from German operations and five per cent for ready-mix in Euro terms.

The group's Spanish operations saw cement demand rise by four per cent in 2019 compared to 2018, while ready-mix sales rose by two per cent in the same period. The higher demand was fuelled by the residential sector and the industrial and commercial sectors. Cement export volumes from Spain, which represented 16 per cent of Spanish cement sales for the group fell by 58 per cent in 2019. Average sales prices for cement in 2019 rose by four per cent in 2019 and ready-mix prices increased by two per cent.

The rest of Europe saw an increase in cement sales of five per cent in 2019 and ready-mix sales grew by one per cent compared to 2018. 82 per cent of exports were traded within the rest of Europe region, with 18 per cent sent to Asia, the Middle East and Africa. Average selling prices for cement for Cemex rose by seven per cent and ready-mix by six per cent in 2019.

South, Central America and the Caribbean
Cemex recorded a rise of nine per cent in domestic cement sales in Colombia in 2019 compared to 2018 and ready-mix sales volumes rose by five per cent over the same period. Average sales prices rose by five per cent in 2019.

In Panama Cemex had a 15 per cent decline in cement sales volumes in 2019 compared to 2018 and ready-mix sales volumes fell by 28 per cent in the same period. A slowdown in construction, high inventory levels for apartments and offices and delays in infrastructure projects impacted results. Cement export volumes increased by 80 per cent in 2019 compared to 2018. Average cement prices in the country fell by six per cent for Cemex operations and in ready-mix they decreased by three per cent.

The Caribbean saw a four per cent decline in cement demand in 2019 compared to 2018. Ready-mix sales volumes decreased by 15 per cent in the same period. Average sale prices of cement remained flat and decreased by seven per cent for ready-mix.

The Dominican Republic had a six per cent increase for Cemex in cement demand in 2019, but ready-mix sales decreased by five per cent compared to 2018. Cement demand was led by tourism-related projects and the residential sector. Cement exports decreased by six per cent over the period, but average selling prices for Cemex’s cement in the country rose by nine per cent in the year. Average ready-mix prices in 2019 also rose by nine per cent.

The rest of the South, Central America and Caribbean saw an 11 per cent decrease in cement sales and 29 per cent fall in ready-mix sales volumes in 2019 compared to 2018. Average sale prices for cement were flat and rose by seven per cent for ready-mix.

Asia, Middle East and Africa
Cemex's domestic cement sales in the Philippines decreased by three per cent in 2019 due to two typhoons which effected Luzon and Visayas cement sales. Exports of cement represented less than one per cent of cement sales volumes of the company’s Philippine cement sales. Average cement prices rose by four per cent in 2019.

Israel reported concrete sales volumes increasing by five per cent in 2019 compared to 2018. Average ready-mix prices fell by one per cent in the year.

The rest of Asia, Middle East and Africa had a fall in domestic sales volumes by 21 per cent in 2019 and ready-mix sales decreased by 23 per cent on 2019 compared to 2018. Cement export volumes represented less than one per cent of Cemex cement volumes from the region. Average selling prices of cement increased by three per cent over 2019 and ready-mix prices rose by three per cent in the same period.

Outlook
Cemex states that the main downside concern relates to the COVID-19 pandemic, including shutdowns of non-essential infrastructure business, stricter border controls, stringent quarantines and social distancing, which are all having a substantial negative impact on the world economy.


As of 31 December 2019 Cemex operated 93.1Mta of installed cement capacity and group cement sales volumes rose to 62.8Mt in 2019.