Indonesian cement market contracts 16% in July

Cement demand in Indonesia declined 16.3 per cent YoY to 5.3Mt in July 2020, according to the Indonesian Cement Association (ASI).

The market of Sulawesi saw the largest contraction at 26.1 per cent to 413,000t. However, the drop in consumption in the key markets of Sumatra and Java had a greater impact. In Java cement demand fell by 19.7 per cent to 2.96Mt while in Sumatra, consumption declined by 9.8 per cent to 1.14Mt. In Maluku and Papua cement sales were up 12 per cent YoY to 164,000t.

In the January-July 2020 period cement consumption in the archipelago fell 9.2 per cent YoY to 32.51Mt.

"There are five months remaining in 2020. If sales during these five months can be similar to last year and exports can increase to a maximum of 200,000 per month or increase by one million until year end,  domestic sales would  decline by about three per cent only," ASI Chairman, Widodo Santoso, said to Bisnis.

Output from Indonesia’s cement plants declined 6.3 per cent to 36.92Mt. If domestic and global cement consumption do not improve, it is expected that cement production in Indonesia will fall by more than five per cent.