Brazil's cement market contracts 2% in October

Cement sales in Brazil declined by 2.1 per cent to 5.257Mt in October 2023 when compared with October 2022, when sales reached 5.368Mt, according to the Brazilian cement association, SNIC.

The southeast, the largest market, saw sales contract by 2.9 per cent YoY to 2.382Mt in October 2023 from 2.453Mt in the year-ago period while in the northeast sales slipped by 0.9 per cent YoY to 1.092Mt from 1.102Mt. Sales in the south fell by 3.7 per cent YoY to 0.851Mt in October 2023 from 0.88Mt. The central-west reduced its off take by 0.9 per cent YoY to 1.092Mt in October 2023 from 1.102Mt in the equivalent period of the previous year. The north, the country’s smallest market, bucked the trend with a 3.5 per cent increase in sales to 0.269Mt in October 2023 from 0.26Mt in October 2022.

The drop in sales has been attributed to the macro-economic scenario and climate conditions, with above-average rainfall and drought in several regions. High interest rates continued to affect family consumption and property finances with household indebtedness remaining at the high level of 47.8 per cent. Consumer confidence fell again after four months of increases, with pessimism in all sectors.

Retail sales of construction materials have fallen 2.2 per cent in the January-September 2023 period with real estate sales following this trend with a YoY drop of 15.8 per cent in the 1H23.

 “The demand for cement is closely linked to wages and income. These aspects, in turn, are connected to jobs and macroeconomic indicators. Salaries did not recover at the same speed as jobs, directly affecting the construction sector. Furthermore, the interest rate, which remains high, has established great competition between real estate and financial assets,” said SNIC President, Paulo Camillo Penna.

In the first 10 months of 2023 cement sales in Brazil were down 1.8 per cent YoY to 51.898Mt from 52.842Mt in the 10M22. Sales in the southeast decreased 1.2 per cent YoY to 24.18Mt while in the northeast they remained stable at 10.384Mt. The south reported a 3.7 per cent YoY drop, the largest in the country, to 8.804Mt, followed closely by the centralest, which saw a 3.6 per cent YoY decrease to 6.214Mt in the 10M23. In the north sales fell by 3.3 per cent YoY to 2.316Mt in the 10M23.

Exports
Exports from Brazil dropped 46.4 per cent to 15,000t in October 2023 from 28,000t in October 2022. In the January-October 2023 period there were down 46. 5 per cent YoY to 183,000t from 342,000t in the January-October 2022 period.