Weekly cement market update

Top stories from the previous week, from US petcoke exports rising to 33 million tons in 2019, to Ambuja Cement's profit falling by double digits

• India's cement industry optimistic about 2020. Demand for cement in India has started to recover from December, as volumes are growing by three to five percent year-on-year. Motilal Oswal also expects the cement sector margins to remain strong in the March quarter, as costs have been declining and price hikes resume in calendar year 2020, after decreasing in the second half of the previous year. Prices have also expanded since the start of 2020, especially in the southern part of the country in February, and increasing by around four percent quarter-on-quarter across the country, and by six percent year-on-year.
• Cuba sets up new cement production plant. Cuba has modernized the existing facility to the northeast of Camag├╝ey and raised its capacity to a total of 600,000 tons per annum, reports Radio Nuevitas. According to the viceminister for Economy and Planning, Adonis Nu├▒ez Fonseca, the government will also be creating a new cement plant with a total capacity of one million tons, which will raise total cement capacity in the island to over four million tons. Once the investments in the industry close, it will no longer be necessary to transport cement to the provinces of Holgu├¡n, Santiago and Guant├ínamo, and could also lead to a rise in cement exports.
• Algeria's cement exports exceed plans for 2019. Algeria exported over USD 60.7 million worth of cement in 2019, a surge of 141.2 percent from 2018, and exceeding the initial forecasts. The surplus in cement production is expected to reach between ten and 15 million tons, which could bring exports of the material up to USD 500 million. Forecasts for 2020 assume a national production capacity of 40.6 million tons, with 20 million for GICA, 11.1 million tons for LafargeHolcim Algeria, and 9.5 million tons distributed among the rest of the private operators.
• HeidelbergCement participates in new sustainable fuel study in the UK. HeidelbergCement's British subsidiary Hanson UK is taking part in a research project on the use of climate-neutral fuels for cement production, the company announced. The project investigates the potential to reduce carbon emissions by switching from fossil fuels to hydrogen and plasma technology. The research project has been coordinated by UK industry body the Mineral Products Association (MPA) and is funded by a GBP 3.2 million award from the Department for Business, Energy and Industrial Strategy (BEIS). Cement production using hydrogen and biomass fuels on an industrial scale will be demonstrated at Hanson UK's Ribblesdale cement plant. The research results will then be shared across the industry to maximise the environmental benefit of the technology. Simon Willis, CEO of Hanson UK, said: "Cutting CO2 emissions is a key priority for us and we are delighted to be playing a leading role in this project". "We have been very effective across the Group in reducing our CO2 emissions, partly through the steadily increasing use of alternative fuels," said Dr Dominik von Achten, CEO of HeidelbergCement. "In addition to our activities in the field of carbon capture, use and storage, this project in the United Kingdom is an important step towards realising our vision of producing CO2-neutral concrete by 2050". HeidelbergCement aims to reduce its specific net CO2 emissions per tonne of cement by 30% compared to 1990 by 2030. This target has been approved by the Science Based Target initiative (SBTi) and is in line with the goals of the Paris Agreement, making HeidelbergCement the first cement company worldwide to have approved science-based CO2 reduction targets. In 2018, the reduction achieved was around 20 %; in 2019, it was already around 22 %.
• Grupo Cementos de Chihuahua's net sales rise in 2019. Grupo Cementos de Chihuahua (GCC), a leading supplier and producer of cement and concrete in the United States, Mexico and Canada, announced its results for the fourth quarter and full year 2019. During the year, the company's consolidated net sales rose by 5.8 percent to USD 934.1 million, while EBITDA rose 13.9 percent to USD 292 million. Enrique Escalante, GCC's Chief Executive Officer, commented: ÔÇ£We closed 2019 delivering strong results despite the challenges we faced during the first half of the year. Our strong operational capabilities coupled with our robust and unique distribution network enabled us to quarterly record high cement volumes in the U.S, exceeding our annual guidance, on the back of improved weather conditions. Mexico, which performed above our expectations, both in volumes and prices, also contributed to these strong results.ÔÇØ ÔÇØDuring the year we also made significant progress in our sustainability efforts by implementing best practices to mitigate impacts on our environment and on the communities we serve, further strengthening our Company's long term strategy,ÔÇØ added the CEO. Mr. Escalante continued, ÔÇ£Looking ahead, the underlying trends of our business remain strong and we expect positive momentum to continue in 2020, while the US economy continues to show solid economic fundamentals, we are cautiously optimistic about Mexico on the back of macroeconomic conditions and an increasing competitive environment.ÔÇØ

• US: Portland Cement Association launches new educational campaign for cement-based concrete. The Portland Cement Association (PCA) announced Shaped by Concrete, a new educational campaign to increase awareness of the sustainability, resiliency and durability of concrete made with cement. The campaign will feature stories based on these themes, exploring how these construction materials shape the world around us to make our communities, cities and country better. With impacts from climate change, growing populations and accelerating urbanization creating demand for safe, affordable housing, there has never been a more important time to explain how and why concrete became ÔÇô and continues to be ÔÇô the material of choice for virtually every type of construction through its positive impacts on society. ÔÇ£As we prepare for the challenges future generations face, concrete will be even more critical to building a sustainable world for tomorrow,ÔÇØ said Mike Ireland, president and CEO of the Portland Cement Association. ÔÇ£Concrete is the most durable, resilient, available and affordable material in the built environment, supporting sustainable economic, social and environmental development priorities, and the Shaped by Concrete campaign is how weÔÇÖll tell that story to stakeholders and partners.ÔÇØ Shaped by Concrete will focus on key themes often overlooked and underrepresented in conversations and media coverage of cement and concrete, including their ability to meet sustainable development goals, decrease costs from natural disasters, and assist with key societal challenges, such as our nation's housing crisis.
• Spain's cement demand falls in January. Cement consumption in Spain has fallen by 8.6% in January, reports Oficemen, the Spanish cement manufacturers' association. Cement demand stood at 1,035,484 tons, almost 100,000 tons less than in the same month of 2019, according to the latest data published in the Cement Statistics. This is the third consecutive month of accumulated declines, a circumstance that has not occurred in the country since the last quarter of 2016, the last year that closed the sector in the red. These data reduce consumption growth in the mobile year (February 2019 - January 2020) by 1.4 percentage points, which places it at 4.5%. "The beginning of this year maintains the deceleration path initiated in the last half of 2019," explains Oficemen President Victor Garc├¡a Brosa. ÔÇ£Housing, which has been an engine in recent years, is also slowing down. Given the practical absence of public works, it seems that the cement sector, and with it the construction sector, will continue at low hours. Public works cannot continue to stop. Infrastructures must fulfill their function of economic revitalizationÔÇØ, adds Garc├¡a Brosa. In addition, the infrastructure deficit further condemns the "Empty Spain", since the opportunities they offer are essential for the structuring of the territory. Exports continue to fall and now total 32 months in red numbers, with a further decrease of 6.8% in January. During the past month almost 35,000 tons have been lost, with a volume below 500,000 tons. In the whole of the mobile year (Feb'19-Jan'20), the fall remains above 20%, with a loss of 1.7 million tons.
• MPA receives grant for new decarbonization project involving cement production. The Department for Business, Energy and Industrial Strategy (BEIS) has awarded the Mineral Products Association (MPA) GBP 6.02 million for ground-breaking demonstrations of hydrogen and plasma technology, announced the association. The project will demonstrate the potential of these technologies to reduce carbon emissions through fuel switching from fossil fuels in cement and lime production. The cement trials will take place at sites operated by Tarmac and Hanson Cement. The cement production trial comprises two demonstrations, one of electrical plasma energy and biomass fuel and the other of hydrogen and biomass energy. The UK lime production trials will take place at a site operated by Tarmac - demonstrating the applicability of hydrogen as an alternative to natural gas for lime manufacturing. Both projects will see their results shared to their wider industries and supply chains, to spread the benefit to UK and global industry, and maximise the environmental benefit of the technology. The MPA projects are forecast to be completed by the end of March 2021. Minister for Business, Energy and Clean Growth, Kwasi Kwarteng, said: "Reducing emissions from homes and industry is a key part of our work to eliminate our contribution to climate change by 2050. This innovative project by MPA and its members is an exciting development and could make a significant impact on our net zero ambitions." Nigel Jackson, MPA Chief Executive, said: "This important award demonstrates MPA members' commitment to collaborative research and innovation to meet the industry's climate change objectives. We are proud to be able to facilitate this collaboration between our members and Government and it's the latest example of our ongoing efforts to deliver our contribution to tackling climate change."
• ACC's net profit rises in December quarter. ACC reached an 18 percent year-on-year rise in consolidated net profit at INR 273 crore for the quarter ended on December 31. The company's net sales expanded by five percent to INR 3,970 crore during the quarter, while the operating EBITDA grew 11 percent to INR 541 crore. ÔÇ£We continue on our strong growth trajectory and have delivered a robust performance. Expansion in EBITDA has been supported by growth in premium products, higher value added services in our Read Mix Concrete business and efficiencies in manufacturing, supply chain and support functions. Our expansion projects are well on track,ÔÇØ said Neeraj Akhoury, Managing Director and CEO, ACC. ÔÇ£Input cost optimized through better material source mix optimisation and supply chain management. Freight & Forwarding cost reduced year-on-year due to improvement in logistics efficiency,ÔÇØ ACC said in a release.
• Cemex launches new sustainability strategy. CEMEX announced a new Climate Action strategy, which outlines the company┬┤s vision to advance towards a carbon-neutral economy and to address society's increasing demands more efficiently. As a result of the company's efforts to date, it has reduced its net specific CO2 emissions by more than 22% compared to our 1990 baseline. But we acknowledge that this is not enough. This is why we have defined a more ambitious target of a 35% reduction of net specific CO2 emissions by 2030. This new goal is aligned with the Science-Based Targets methodology, a requirement climate science says is necessary to meet the goals of the Paris Agreement. ÔÇ£Climate change has been a priority for CEMEX for many years. Our efforts have brought significant progress to date, but we must do more. This is why we have defined a more ambitious strategy to reduce CO2 emissions by 2030 and to deliver net-zero CO2 concrete by 2050,ÔÇØ said Fernando A. Gonzalez, CEO of CEMEX. To fulfill this strategy, the company has a detailed CO2 roadmap to accelerate the roll-out of proven technologies in all of our facilities, including investing in energy efficiency, using alternative fuels, expanding the use of renewable energy, and increasing the substitution of clinker with alternative cementitious materials. Furthermore, the company's new net-zero CO2 concrete aspiration for 2050 sets it on a path of open innovation that requires strategic partnerships and cross-industry collaboration in the development of breakthrough technologies like carbon capture, utilization, and storage; novel clinkers with low heat consumption, alternative decarbonated raw materials, carbonation of concrete waste for use as recycled aggregates, and the promotion of circular economy models that transform waste into fuel. CEMEX currently consumes as either alternative fuel or alternative raw material 32 times more waste from other industries than the waste it generates and sends to landfill.

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