Spanish cement sales outlook improving but exports likely to remain weak

Cement consumption in Spain recovered in April after poor weather and fewer working days weighed heavily on the 1Q24. Sales rose 11.5 per cent YoY to 1.324Mt, up from 1.188Mt in April 2023, according to the Spanish cement association, Oficemen. Oficemen notes that "it's the first month in positive after ten in decline. However, this percentage of growth has been influenced by the calendar effect, with the month of April of this year with more working days” and that when looking at working-day adjusted data cement sales contracted 8.8 per cent YoY in April.

Meanwhile, exports were down 23.8 per cent YoY, coming in at 387,517t. 
 
January-April 2024
Cement consumption was down 4.5 per cent YoY in the first four months of 2024, amounting to 4.65Mt, down from 4.87Mt in the same period a year earlier.
 
Exports fell by 25.3 per cent YoY in the January to April period, coming in at 1.447Mt.

12-month moving average
Oficemen notes that in the last 12 months (May 2023 to April 2024) cement sales fell 4.5 per cent YoY to 14.28Mt, with 672,600t less than the previous period, while exports are below 5Mt, with a loss of close to 1Mt.
 
Outlook
Both domestic and foreign cement sales are underperforming amid lingering weakness at home and in the key export markets of the UK and France.

The expected gradual improvement in the Spanish construction sector will help lift domestic cement demand as 2024 progresses. Construction grew two per cent QoQ and 3.6 per cent YoY expansion in the 1Q24 and according to the monthly construction sector survey by the Ministry of industry and Tourism, a further improvement was recorded in April with new orders and employment expectations picking up. 

However, the outlook for key export markets is less upbeat as residential property markets struggle. While expected activity in the French construction sector improved in May, according to the latest survey from the French national statistics office, INSEE, it remains below its long-term average and the outlook for new dwellings is particularly downbeat. Meanwhile in the UK new private house construction contracted 13.7 per cent YoY in the 1Q24 and house price growth continues to cool.