Brazil market expands in June with expectations of 6% growth in 2021

Cement sales in Brazil edged up 1.5 per cent to 5.438Mt in June 2021 from 5.358Mt in June 2020, according to the country’s cement association, SNIC. Self-construction as well as residential and commercial renovation continue to rise while increasing sales are further supported by works in the real estate sector.

Growth was strongest in the southern region, where sales advanced 11.4 per cent YoY to 0.91Mt from 0.817Mt in June 2020. There was also robust growth in the north as 0.272Mt of cement was sold in June 2021, representing a rise of 6.7 per cent YoY from 0.255Mt. In the central-eastern part of Brazil sales advanced by 3.3 per cent YoY to 0.652Mt from 0.631Mt. However, Brazil’s two largest regional markets reported a contraction in sales. The southeastern market saw sales slip by 0.8 per cent YoY to 2.536Mt in June 2021 from 2.556Mt while the northeast reported a 2.8 per cent drop in sales to 1.068Mt in June 2021 from 1.099Mt.

Exports saw a 50 per cent surge from 24,000t in June 2020 to 36,000t in June 2021.

January-June 2021
Domestic sales in the first six months of 2021 advanced 15.4 per cent to 31.267Mt from 27.087Mt in the 6M20.

The central-eastern region led the market’s expansion as sales increased by 21 per cent YoY to 3.559Mt in the 1H21 from 2.941Mt. In the south and north sales were up by ~19.5 per cent YoY to 5.38Mt (1H20: 4.497Mt) and 1.333Mt (1H20: 1.117Mt), respectively. More modest rates of growth were seen in the two largest regional markets. The northeast reported a 15 per cent rise to 6.312Mt from 5.488Mt while in the southeast sales were up 12.6 per cent 14.683Mt from 13.044Mt.

Exports in the 1H21 increased 133.3 per cent to 196,000t from 84,000t in the 1H20.

Outlook
However, SNIC highlights a slowdown in market growth. Year-to-date market growth until the end of May was 19.3 per cent, a significant difference with 15.4 per cent in the YtD market expansion by the end of June. But prospects for market growth remain positive, supported by new auctions for regional airport, municipal, highway and railway concessions remain. As a result, SNIC expects cement demand in 2021 to show growth of approximately six per cent.

“We believe that the sector should continue at a good pace of growth. The rise in residential property sales at surprising levels supports the performance of the cement sector, but requires caution for the future. It is essential to continue real estate launches, maintain the pace of construction, increase wages (employment and income) and economic activity, which will keep the self-builder's breath and the entrepreneur's confidence alive. Infrastructure continues to be an extremely important activity for the cement industry and the results of the auctions and concessions that took place mainly from April onwards will begin to be noticed in 2022,” said Paulo Camillo Penna, president of SNIC.