World Cement Report: Now to 2020

World consumption of cement is forecast to continue to increase throughout the next 15 years, taking the annual volume up from the 2283mt of 2005 to around 3130mta by 2015, and 3560mta by 2020, representing overall forward expansion of approximately 56%
According to the 203-page Report "GLOBAL CEMENT to 2020"*, world production and consumption of cement approximated 2283mt in 2005, this level representing an increase of approximately 5.75% (124mt) on the previous year, and a continuation of the annual underlying expansion which has seen year-on-year growth in almost every year since the 1970s. In tonnage terms, the past half-decade witnessed a global expansion of 633mt, with almost 70% of this overall growth (440mt) coming from East Asia alone, with 76mt from other Asian countries. Other regional expansion includes 7mt for C/S America, 44mt for Africa/Middle East, 48mt for Europe, and 20mt for North America. The volume of cement entering world trade has traditionally been low relative to overall production and consumption - typically accounting for approximately 6-7% in aggregate terms (6.8% in 2005). This is linked to the low unit value of cement, the widespread availability of raw materials, and the link between economic growth and cement consumption - all these factors favouring domestic production rather than import dependence. Trade volumes have risen almost continuously over the past 35 years, advancing from 20mta in 1970 to 71mta by 1990 and a 2005 total of 155mt. Most recently, year-on-year growth approximated 7.7% in 2004 and almost 6% in 2005 – linked to US import growth, but also supported by high volume trade within Europe, the Middle East, and Asia. This trade growth – summing 19mt (14%) in 2 years – occurred against a background of unprecedented increases in shipping costs. Within the latest trade total, finished cement trade approximated 107.2mt, with approximately 47.6mt of clinker moved internationally. There has been a shift towards greater significance for clinker within the trade aggregate recently – linked to a number of factors, largely market-specific, as well as to the increased involvement of the multinationals in cement capacity ownership throughout the world. On a regional basis, 2005 saw totals of 37mt imports and 47mt exports for Europe - including high volumes of intra-European trading (often non-seaborne). Within Asia, S/E Asia and E Asia account for a high share of world exports (15.5% and 23% respectively in 2005), although exports from SW Asia (mainly India) have increased in recent years. Elsewhere, North America (USA) is a major import market, whilst Africa and the Middle East play a significant role in both world exports and imports.For future cement markets, there are very different forward patterns of growth expected for individual regions. Thus, for the main individual regions total forward growth ranges from 1% for North America to over 70% for SW Asia and parts of Europe, and to over 90% for SE Asia. At the global level, 5-year expansion is expected to approximate 19.75% in 2005-10, slowing to 14.5% in the next half-decade and 13.75% in 2015-20. Above average growth is anticipated for SE Asia and SW Asia in each of the halfdecades, with growth approximating 29%, 23.5% and 19.25% respectively for the former. Cement demand in Africa is also expected to be above average in each period, with halfdecade performance of over 21% growth for 2005-10, slowing to 13.8% in 2015-20. A similar profile is recorded for Latin America, whilst for North America, the dominance of the US in the regional profiles dictates a net advance of almost 13.5% in 2005-10, but a contraction of 6.4% and 4.5% in the subsequent half-decades. Growth in the EU 15 is also expected to be well below the world average, whilst for Other Europe the growth performance is expected to approximate over 25% in 2005-10, slowing to 14.7% in 2015-20.Of the total 1280mt forecast increase in world cement consumption, over 72% is set to occur in Asia – with volume increases of 710mt for East Asia, 109mt for SW Asia and 111mt for SE Asia.The Study includes a set of alternative forward scenarios :-In the Low Case, the world cement consumption aggregate is projected to grow only marginally in the near-term, followed by more significant growth thereafter. The global total is projected to reach over 2440mt by 2010, and 2995mta by 2020 - representing overall forward expansion of just over 31%.In the High Case, the profile is somewhat different, in that average annual expansion is expected to be relatively high over the near/medium-term, slowing thereafter. In tonnage terms, this translates to a projected level of around 3075mta by 2010, rising to 4220mta by 2020. Total forward growth approximates 85%.The development of future cement trade volumes will continue to be dominated by essentially short-term import requirements, set against an underlying background of clinker import dependency and other long-term supply patterns. Trade volumes will remain highly susceptible to cost and availability factors, with any major shift in shipping costs being of potential primary significance in this regard, as witnessed in the past 2-3 years. The continuing consolidation of the cement industry at the global level – in terms of capacity ownership by the cement majors – will continue to act as a restraint on imports in some markets and will encourage trade in others. The very nature of the cement trade suggests continued significant year-on-year volatility for individual markets and potentially at the aggregate trade level throughout the study period. This will continue to be exacerbated by any major movement in shipping costs through bulk carrier freight rates.In 203 pages, the highly detailed and extensive new report contains analysis of cement production, consumption, imports & exports for individual countries throughout the world. The Report includes detailed forecasts of developments throughout the period to 2020, and is essential reading for all parties with an interest in the future development of the cement industry.

Serious Shortage of Cement in Nigeria

NIGERIA: The Minister of Commerce and Industry, Mr Charles Ugwu, has in Abuja predicted that demand for cement in the country will rise to approx. 17 million tonnes in 2008.
“Unfortunately, as of today, only about four million tonnes are being produced locally, though production will push up to about seven million tonnes with the new capacity being built.
Ugwu, who gave these figures at a meeting with stakeholders in the industry said: “Yet a deficit of about 10 million tonnes of cement is recorded”.
He said government would allocate the shortfalls to investors in the downstream sector to import.
“Blending of the cheap imported clinker with the locally manufactured cement will allow Nigerians to enjoy better prices, “ he said.
He said the meeting was a working session where every stakeholder had an opportunity to explain specific problems of the sector to address both supply and price issues.
“I have read the files and heard the situation in the industry, the president has called me and said the situation must change rapidly,” Ugwu said.
The Minister said government was aware of the agony faced over road transportation and other logistics, adding that the president was committed to seeing major improvements in the provision of vital infrastructure.
“But the president has expressed a great deal of anxiety that in every commodity where government has intervened to support local manufacturers, things have always turned for the worse, rather than getting better.”
“When we look at sugar, cement, flour and other areas where government had tried to restrict import in order to give fair opportunities for local manufacturers, prices have skyrocketed, “ he added.
He said noticeable shortages had developed in a way that could make one question the logic of the incentives that were given.
“Everyone here has the responsibility to ensure that the supply is good, regular, adequate and that prices are fair, so that both the consumer and supplier will have fair returns.

Thankfully, restrictions on importing cement have now been lifted. Yes Mr. President...stop meddling. Closing down factories DOES NO GOOD.

Temporary Measures in Malawi Cement Imports

MALAWI: Über Cement producer Lafarge Portland says it will investing $75-million in a new limestone-mining project at Chenkumbi Hills, in Malawi’s southern district of Machinga. The cement manufacturer, which has been importing clinker and gypsum from Circle Cement, of Zimbabwe, says it is moving fast to start production at the Chenkumbi mine as soon as possible because the continuing economic crisis in Zimbabwe is leading to “unstable prices and a shortage of the raw materials”. “The situation looks grave,almost irreperable, and there are no signs of an immediate solution. We are not even sure whether the clinker that trickles from Zimbabwe will continue and suffice for an average monthly requirement of 17 000 MT" says Lafarge Portland Malawi commercial manager Nesta Msowoya. Lafarge Portland started importing clinker from Zimbabwe in November 2002, when it closed its Changalume limestone mine after a survey had revealed that the mine no longer had enough commercially mineable deposits. Msowoya says dwindling supplies of clinker from Zimbabwe have obliged them to start importing from China.“This decision is also not at all favourable because it has increased landed costs by 38%, thereby leading to a 14% cement price hike by the company,” explains Msowoya .He says Lafarge is fast-tracking the development of the mine at Chenkumbi so that it becomes operational in 2009. Meanwhile, the Malawi government has removed restrictions on the importation of cement, which it put in place in 2000, after Lafarge Portland and Shayona Cement complained about “unfair” competition posed by cheap imports from Zimbabwe. Malawi’s Trade and Industry Minister, Ken Lipenga, says the government has removed the restrictions owing to the current shortage of cement.“The shortage of cement in the country has come at a time when there is a lot of construction work(think World Cup Infrastructure). We have, therefore, resolved to open the gates to anyone who wants to import cement into the country.“This implies that importers will no longer have to seek licences to import cement. It should be noted that this is only temporary measure, which will be reviewed once the situation gets back to normal,” says Ken Lipenga. A bit unusual.