Domestic cement sales in Brazil increased by 3.5 per cent YoY to 6.175Mt in August 2024 from 5.968Mt in August 2023, reports the country's cement association, SNIC. Sales volumes benefitted from a 5.6 per cent YoY rise in daily dispatches, reaching 252,000tpd in August 2024.
Brazil is facing its worst drought in history, leading to the announcement of a red flag energy bill that could impact production costs and logistics, particularly in the North region. Additionally, labour shortages and the potential increase in the Selic rate have been identified as key constraints on sector growth, despite the Construction Confidence Index remaining stable in August, marking the fourth consecutive month without a decline.
Consumer confidence rose for the third consecutive month, supported by a strong labour market and controlled inflation, although the pace of growth has slowed. The industry, after a period of continuous improvements in demand and reduced stocks, continues to maintain positive prospects for the end of the year, though cost pressures and macroeconomic concerns persist.
In August 2024 cement dispatch volumes across Brazil showed notable increases in comparison to August 2023. The North region saw an increase from 265,000t to 311,000t, marking a 17.4 per cent rise. In the Northeast, volumes rose from 1.17Mt to 1.3Mt, reflecting a 10.9 per cent increase. The Central-West region experienced a modest rise of two per cent, growing from 734,000t to 749,000t. The South region recorded a growth of 2.6 per cent, with volumes increasing from 984,000t to 1.01Mt. However, in the Southeast, the country's largest market, there was a marginal decrease of 0.3 per cent, with volumes dipping from 2.809Mt to 2.801Mt.
“The industry recorded growth across all regions, reflecting the seasonality of greater cement sales in the second half of the year,” said SNIC Chairman, Paulo Camillo Penna. “However, concerns persist about the drought’s impact on production costs and the recent budget cuts in the Growth Acceleration Program (PAC), which raise uncertainties about infrastructure investments.”
“The resumption of sanitation auctions and highway concession notices should gain space in the demand of the cement industry for next year. Until then, the residential real estate segment should continue to star in cement consumption, driven by the good performance of the Minha Casa Minha Vida programme,” added Mr Penna.
From January to August 2024, cement sales across Brazil's regions showed varied YoY performance, compared to the same period in 2023. In the North, sales increased by 14.3 per cent, rising from 1.788Mt in the 8M23 to 2.043Mt in the 8M24. The Northeast region also saw an uptick, with sales growing by 6.4 per cent from 8.302Mt in the 8M23 to 8.838Mt in the 8M24. In the Central-West region, sales rose by 2.7 per cent, increasing from 4.886Mt in the 8M23 to 5.016Mt in the 8M24. The Southeast region, Brazil's largest market, experienced a 2.1 per cent increase, with sales moving from 19.465Mt in the 8M23 to 19.869Mt in the 8M24. The South region also reported growth, with sales up by eight per cent from 7.115Mt in the 8M23 to 7.713Mt in the 8M24.
However, despite positive domestic sales, exports saw a significant decline, dropping by 69.7 per cent YoY to 46,000t in the January-August 2024 period from 152,000t in the same period of 2023, reflecting ongoing challenges in the international market.
