Brazilian cement market contracts 9% in January

Total cement sales in Brazil (including exports) declined by 8.6 per cent YoY to 4.6Mt in January 2022, according the country’s cement association, SNIC. When compared with December 2021, sales were down 3.7 per cent. In terms of sales per working day, sales fell 10.8 per cent YoY and 3.9 per cent MoM to 197,400t.

SNIC attributed the fall to the worsening of the country’s economic situation and health issues (the new COVID-19 variant Omicron and influenza). The rise in inflation and interest rates, less accessible real estate credit, household indebtedness and the poor performance of the Southeast region, the largest producer and consumer of cement. Sales to the self-build segment have also slowed as high unemployment, indebtedness and reduced income have taken their toll. However, the main drivers of activity continued to be real estate construction and the resumption of infrastructure works.

In addition, the cement sector continues to feel the pressure by increasing input costs, particularly electricity and thermal energy (petcoke), sacks and refractories.

“The great challenge for the cement sector will be to ensure the performance from 2019 to 2021, which contributed to the recovery of part of the losses from the period 2015 to 2018 during the worst crisis in the history of the cement industry,” said Paulo Camillo Penna, president of SNIC.

Total domestic sales fell by 8.8 per cent YoY to 4.541Mt, down from 4.979Mt in January 2021. In terms of regional performance, the country’s two largest markets saw the largest contractions. The Southeast saw sales contract by 13.3 percent to 2.043Mt in January 2022, down from 2.356Mt in January 2021.In the Northeast, the country’s second-largest market, sales were down 15.2 percent to 0.951Mt from 1.121Mt over the same period. The Central-West market took a 5.2 per cent hit to 0.514Mt in January 2022 from 0.542Mt in January 2021. However, growth was noted in the South and North regions, where sales advanced YoY by 9.2 per cent to 0.834Mt and 1.5 per cent to 0.199Mt, respectively in January 2022.

In terms of exports a 25.8 per cent increase was reported, with volumes reaching 39,000t in January 2022 from 31,000t in January 2021.