Sales of cement in Brazil saw a five per cent drop to 5.184Mt in June 2022 when compared with June 2021, according to the latest data by the Brazilian cement association, SNIC.

The association attributes the drop to the uncertainty surrounding the Russia-Ukraine war impacting energy supplies. The price of petcoke increased 73.5 per cent in the last 12 months. In Brazil, electricity, freight, sacks, plaster and refractories saw strong price increases.

“Household indebtedness remains high¹ and inflation insists on remaining at two digits. The rising interest rate is 13.25 per cent, which makes housing financing even more expensive, causing a decrease in sales of real estate units. This is already reflected in the number of units financed by the SBPE2 - which, after rising 298.6 per cent last year, presents a performance of 7.1 per cent in the accumulated until May of this year - and in real estate launches which fell by 2.6 per cent in the 1Q22 compared to the 1Q21. This behaviour of high sales and decline of real estate launches reduces the stock of works, compromising the performance of the cement industry in the short and medium term, according to Paulo Camillo Penna, president of SNIC.

In terms of regional sales in June 2022, the southeast, Brazil’s largest market, reported a 4.8 per cent YY drop to 2.556Mt, while the second-largest market, the northeast saw an 11.3 per cent fall in volumes to 1.067Mt. In the south and north sales contracted by 4.4 per cent to 0.908t and by 3.7 per cent to 0.271t, respectively. Only the central western market expanded, by 3.7 per cent YoY to 0.652Mt.

Exports saw a 47.9 per cent YoY drop to 25,000t in June 2022.

January-June 2022
In the first six months of 2022 sales in the domestic market slipped by 2.7 per cent YoY to 30.585Mt from 31.435Mt in the 6M21.

In terms of regional markets, the contraction was the largest in the northeast were sales fell by 4.7 per cent YoY to 6.034Mt. Sales in the southeast declined by 4.4 per cent to 14.208Mt. In the north and south deliveries slipped by 0.3 and 0.2 per cent, respectively to 1.328Mt and 5.364Mt. The central western market was the only one to report growth, at 3.2 per cent, to 3.651Mt.

Exports were down 8.5 per cent YoY to 193,000t in the January-June 2022 period.

2022 forecast
Looking ahead, the domestic cement market is expected to contract by 1-2 per cent in 2022 when compared with 2021.

“Despite the slight increase in the number of real estate units sold, launches fell in early 2022, already reflecting the uncertainties generated by the macroeconomic environment. The negative highlight was the Casa Verde Amarela program, which performed below expectations. On the other hand, there is a promise from the federal government to increase the subsidy and reduce the interest rates of this program, which could bring a boost to the construction sector,” said SNIC.