Brazil’s cement market expands 12% in November

Brazilian cement sales in November totalled 5.315Mt, representing an increase of 11.7 per cent when compared with November 2019, according to the country’s cement association, SNIC.

Sales in November advanced 8.6 per cent YoY to 2.397Mt in the key southeast region while in the northeast, the country’s second-largest market, they were up 10.4 per cent YoY to 1.125Mt. In the south offtake increased 19 per cent YoY to 0.916Mt. In the central-eastern market a 18.8 per cent rise to 0.613Mt was reported while in the north the market expanded by 5.9 per cent to 0.233Mt.

However, per working day sales declined 5.2 per cent to 240,200t, indicating the peak of growth this year has passed.

“Consumer confidence fell for the second consecutive month in November, according to a study1 by FGV, reflecting the worsening of the current situation and expectations for the coming months. The uncertainty related to the continuity of the pandemic and its potential impact on the economy generates distrust. With the probable extinction of the emergency benefits, many consumers will feel for the first time, in fact, the impact of the pandemic on family income. At the same time, entrepreneurs2 in civil construction also showed less optimism about the performance of the activity,” said SNIC President, Paulo Camillo Penna.

January-November 2020
In the first 11 months of 2020, domestic cement sales advanced 10.3 per cent YoY to 55.834Mt. Sales in the southeast advanced eight per cent YoY to 26.316Mt in the 11M20, while deliveries in the northeast picked up by 14.4 per cent to 11.518Mt. In the south offtake rose by 9.5 per cent YoY to 9.148Mt in the January-November 2020 period. In the central-east cement companies sold 6.411Mt, up 13.8 per cent YoY. The north saw a 10.7 per cent uptick in sales to 2.441Mt when compared with the 11M19.

From June to October 2020 the drop in volumes was driven by a reduction in emergency aid, savings and personal reserves of those who made reforms as well as decline in consumer and business confidence. In addition, the performance of the civil construction sector was below 2H20 expectations.

Outlook
Going forward, much uncertainty remains for Brazil’s cement producers as the reduction of emergency aid, rising unemployment and the lack of prospects for the creation of new jobs to replace government benefit income are set to impact consumers. For the civil construction segment worsening expectations in terms of demand and the business environment are also affecting confidence.