Brazil's cement market expands in July but outlook uncertain

Cement sales in Brazil increased 18.9 per cent YoY to 5.9Mt, according to the country's cement association, SNIC. Cement sales per working day edged up 2.4 per cent MoM.

It follows a recovery first noted in the second quarter of the year following reduced consumption in January and February due to heavy rains and COVID-19 lockdown measures in March.

Private self-construction has benefitted from the drive to transform homes into places of work while SMEs have decided to carry out maintenance and building changes to prepare their premises for work following lockdown. In the real estate market, the resumption of work is in full swing, according to SNIC. Industry surveys showed that only 2.9 per cent of works remain paralysed and 63,000 construction workers are back on-site.

“Despite the concern with the uncertainties surrounding civil construction in the second half, mainly due to the absence of new real estate developments and the increase in unemployment, we see the sector's performance so far, in a very positive way. We continued on an upward path that began in 2019 after four years of decline, an idle capacity above 45 per cent and the closure of 20 factories and dozens of ovens, resulting in a brutal capital burnout. This recovery is still not close to the accumulated loss, but we already see a new moment for the cement industry in the country ”says Paulo Camillo Penna, president of SNIC.

In the first seven months of 2020 cement demand in Brazil was up 6.5 per cent to 32.9Mt when compared with the 7M19. Cement sales per working day during this period advanced 18.6 per cent YoY.

However, the year remains uncertain as there is an absence of major infrastructure works and new real estate project launches. Moreover, the government’s “Casa Verde Amarela” housing programme, which plans the construction of more than 100,000 housing units in the next two years, is currently on hold.