Surging freight and energy rates drive cementitious products pricing in 1Q2022

• Gray cement export is estimated to increase by 4 percent in 1Q2022 quarter-on-quarter
• Since the start of the Russia-Ukraine conflict, there was a new surge in prices across different shipping rates, impacting cementitious products export pricing
• Turkey remained the largest global exporter of gray cement in 4Q2021

Greenwich (CT), USA, March 30, 2022 ÔÇô CW's price index for gray cement export is estimated to increase by 4 percent in 1Q2022 quarter-on-quarter, as the Russia-Ukraine conflict impacts shipping rates and energy prices, according to the 1Q2022 update of the CW Research's Global Cement Trade Price Report.

In addition to the increasing freight rates and energy prices, the resurgence of Covid-19 cases in China is reducing the country's economic activity and increasing port congestion and delays, exacerbating supply-chain disruptions.

"In 1Q2022, cement prices continued to rise as a result of supply-chain disruptions, increased production and logistics costs, caused by the pandemic effect on the global economy, and further exacerbated by the impact of the Russia-Ukraine conflict," assesses Carolina Pereira, Director, CW Group.

Freight rates escalating on the back of the Russia-Ukraine conflict

Since the start of the Russia-Ukraine conflict, there was a new surge in prices across different shipping rates along major trade routes, with the Baltic Dry Index surging by 501 points as of March 22, reaching 2,546 points, compared to the previous month.

Additionally, China's economic activity is reducing due to a resurgence of Covid-19 cases, which is resulting in increased port congestion and delays, driving further escalation in already outrageous container rates.

Turkey remains the largest gray cement exporter in 4Q2021

Regarding gray cement exports, Turkey remained the largest global exporter of gray cement, although export volumes decreased by more than 10 percent on a QoQ basis.

The Mediterranean Basin exported the largest volume of gray cement at a regional level in the fourth quarter of 2021, a trend which is expected to continue during 1Q2022, while prices are likely to rise by almost 6 percent quarter-on-quarter.

Clinker export prices also record growth in the first quarter of 2022

The CW price index for clinker exports is estimated to rise by about 3 percent in 1Q2022, compared to the previous quarter. In the fourth quarter of 2021, clinker volumes increased almost 10 percent QoQ, with Vietnam the largest exporter in the quarter.

In the first quarter of 2022, the CW index price for clinker in the largest clinker exporting region, Asia-Pacific-Japan, is expected to increase by less than 5 percent when compared to 4Q2021.

White cement export prices to be impacted by increasing container freight rates

In the first quarter of 2022, the CW price index for white cement exports is expected to increase by almost 6 percent QoQ. In the fourth quarter of 2021, Turkey was the largest exporter of the commodity.

Global white cement export prices and volumes are expected to be impacted not only by the increasing freight rates but also by the reduction of container quantities from 27 tons to 20 tons per 20 feet container.

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.

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