Global cement prices weaken in second quarter due to COVID-19, mild recovery expected in select markets during the second half of the year

In the second quarter of 2020, gray cement FOB prices are estimated to have a declined on a y-o-y basis but increased on a q-o-q basis. This is due to the effect of the ongoing pandemic on global economic growth and trade, according to the 2Q2020 update of CW Research's Global Cement Trade Price Report.

ÔÇ£The pandemic has disrupted trade at a global level over the past few months, and cement was no exception. Prices dipped as demand collapsed in 1Q of 2020 as markets were suddenly faced with an oversupply, but we are already starting to see some recovery as large markets such as India, China and US emerge from lockdownÔÇØ, observes Prashant Singh,  CW Group's Associate Director.

North America import cement prices are expected to increase in 2Q

North America import prices in 2Q are expected to increase by 4.2 percent quarter on quarter as economic activity recovers the region emerges from imposed lockdowns to halt the spread of Covid-19. In the United States, cement import prices are expected to increase 2 percent from March to June as construction activity continues on the path of normalcy.

Main exports markets to the United States remain Turkey and Canada, but while Turkish export prices have remained stable, Canadian export prices have seen an increase of 2.5 percent quarter-on-quarter.

Turkey continues to lead gray cement exports

In the second quarter of 2020, average trade prices for gray cement continued to decline compared with the equivalent year-ago period. From CW Research's set of countries with data for the second quarter of 2020, Turkey remains the foremost exporter of gray cement, accounting for over 18 percent of the total trade. Turkish FOB prices have remained relatively stable from the beginning of the year, while volumes have seen a marked increase from 4Q of 2019 to 1Q of 2020. While in the second quarter of this year, volumes are estimated to have shown a slight decrease on a q-o-q basis, while having increased on a y-o-y  basis.

With the exception of Argentina, Egypt, Algeria, Poland and Belarus, there was a tendency towards decline or stagnation in cement trade prices when compared with the second quarter of 2019.

Clinker volumes decline in second quarter

Clinker volumes traded worldwide fell mildly during the second quarter when compared with the first quarter, with overall volumes nearing 18 million tons. During this period, countries in Asia-Pacific-Japan exported over ten million tons and clinker prices in the region are estimated to show a mild improvement from around USD 40 per ton in the first quarter.

White cement export volumes are estimated to have dropped by more than ten percent year-on-year to 1.1 million tons for the set of 21 reporting countries with complete data for the period. In terms of pricing, average export prices for the premium commodity remained mostly unchanged on a yearly basis.

Prices for white cement in the Mediterranean Basin were below USD 90 per ton in the first quarter of the year and are estimated to increase in the second quarter. Turkey was also the larger exporter of white cement and its overall cement exports grew in January-April, both in terms of volume and value.

The Global Cement Trade Price Report is CW Research's benchmark price assessment for monthly gray cement, white cement, clinker and granulated blast furnace slag prices and volumes. The 150+ page report, published on a quarterly basis, serves as the industry go-to source for monthly price data for over 70 individual markets worldwide, including multiple cornerstone data series: import, export, ex-works and market prices.

Find out more about the report here.