Brazilian cement market expands 2% in June

Cement sales in Brazil increased by 2.4 per cent to 5.372Mt in June 2024 from 5.248Mt in June 2023, according to the country's cement association, SNIC. Per working day, cement dispatches were up 4.6 per cent YoY to 238,800t.

The increase follows a first semester  affected by high interest rates and family debt as well as extreme weather events, including drought in the central-west and northern regions and intense rains in the south of Brazil. Construction confidence remained stable in June, registering greater optimism than in December 2023, said SNIC. "However, this improvement in activity exposed the difficulty with labour, which is already impacting construction costs. The market's expectation for the end of the Selic falling cycle in 2024 should cool business sentiment in the coming months," according to the cement association.

In the southeast, the country's largest market, sales slipped by 0.3 per cent to 2.48Mt from 2.488Mt, but in all parts of the country sales were up. In the northeast, sales advanced 3.2 per cent YoY to 1.051Mt from 1.018Mt in June 2023 while in the south the market expanded by 6.5 per cent YoY to 0.912Mt from 0.856Mt over the same period. Sales in the central-western region were largely stable, up 0.6 per cent to 0.659Mt in June 2024 from 0.655Mt in June 2023. Brazil's smallest market, the north, saw a 16.9 per cent advance in sales to 0.27Mt in June 2024 from 0.231Mt in the equivalent period of the previous year.

In terms of exports, volumes fell by 75 per cent YoY to 5000t in June 2024 from 20,000t.

January-June 2024
In the first six months of 2024, domestic sales in Brazil picked up by 1.5 per cent YoY to 30.56Mt from 30.155Mt in the 6M23. The southeast accounted for nearly half of sales and reported a 0.2 per cent uptick to 14.11Mt in the 6M24 from 14.086Mt in the year-ago period. Sales in the northeast increased by 3.8 per cent YoY to 6.268Mt from 6.038Mt in the 1H23. However, in the south dispatches slipped by 0.8 per cent YoY to 5.199Mt in the 6M24 from 5.241Mt over the same period. The central-western market saw a two per cent YoY advance to 3.539Mt from 3.47Mt in the 6M23. In the north 1.444Mt of cement were sold in the 6M24, representing a 12.8 per cent increase when compared with 1.28Mt sold in the 6M23.

Exports were down 70.1 per cent YoY to 35,000t from 117,000t in the 6M23.

Outlook
The cement industry expects improvement in the coming months, driven by the works of the Minha Casa, Minha Vida Program, large sanitation auctions and the resumption of investments in infrastructure. However, recent resource cuts and reduced investments affect important works under the Growth Acceleration Programme (PAC), which plays a key role in the demand for cement.

There is also an effective expectation from the sector regarding Law 14,871/24, which seeks to modernise the Brazilian industrial park through accelerated depreciation of new machines, equipment, devices and instruments destined for fixed assets.

"Still at the federal level, the greatest expectation is the approval of the Brazilian Trading and Emissions System and the regulation of Tax Reform. Issues such as specific treatment for civil construction and incorporation, as well as carbon pricing remain central concerns for the sector," says SNIC.