Brazilian cement market sees contraction in 2022
In December 2023 cement sales in Brazil edged up by 0.8 per cent YoY to 4.497Mt from 4.463Mt in December 2022, according to the Brazilian cement association, SNIC.
Growth was led by the largest market, the southeast, where deliveries by 6.4 per cent YoY to 2.037Mt. Market expansion was also seen in the north, the country’s smaller market, where cement demand picked up by 3.4 per cent YoY to 246,000t in December 2023. However, in the northeast sales declined by 2.8 per cent YoY to 983,000t as did in central-west, which saw a 1.2 per cent YoY market contraction as 512,000t of cement were sold. The largest drop in sales, of 7.9 per cent YoY, was seen in the south, with cement deliveries down by 7.9 per cent YoY to 719,000t.
Exports from Brazil plummeted by 71 per cent YoY to 9000t in December 2023 from 31,000t in December 2022.
Full-year 2023
In the full year of 2023, cement dispatches in the domestic market were down by 1.4 per cent to 61.77Mt from 62.623Mt in 2022.
The real estate sector, burdened by high interest rates ranging from 13.75 to 11.75 per cent throughout the year, saw a significant drop in the number of launches. Data until September indicated a 16 per cent reduction in new developments and 6.5 per cent growth in property sales. While the government resumed its Minha Case Minha Vida housing programme, the effects of the programme were not seen until the 2H23.
Although the job market has recovered, wages are still at pre-pandemic level, reducing the populations purchasing power and high levels of household debt. In October 2023, defaults peaked at 71.95m defaulters.
Low infrastructure investment also impacted cement sales despite the relaunched PAC growth acceleration programme. The initiative is expected to see disbursement of BRL1.4trn between 2023-26, but to date the programme has not ramped up to its needed speed and has already been affected by 2024 budget cuts.
"The performance of the cement industry is in line with SNIC projections, which pointed to the low performance of the housing, sanitation and logistics sectors, high interest rates and high household debt. Extreme weather conditions with above-average temperatures and rainfall and drought in some Brazilian regions directly impacted product sales. It is worth highlighting the environmental advances of the Brazilian cement industry as a global reference with lower CO2 emissions and its carbon neutrality project in full development,” said SNIC President, Paulo Camillo Penna.
All regional markets, except the northeast, saw sales decline. In the southeast sales slipped by 0.4 per cent to 28.723Mt in 2023 from 28.829Mt in 2022 while the northeast reported the only increase, by 0.4 per cent, in sales to 12.504Mt from 12.459Mt in the year-ago period. The south saw sales drop by 4.5 per cent, the largest market contraction, to 10.383Mt in 2023 from 10.869Mt in 2022. The central-west saw a 3.2 per cent YoY decline to 7.342Mt in December 2023 from 7.587Mt while in the north sales contracted by 2.1 per cent YoY to 2.818Mt in December 2023 from 2.879Mt.
Exports for the year halved to 203,000t in 2023 from 406,000t in 2022.
