In the fourth quarter of 2018, global gray cement ex-works prices weakened across most major markets, with the exception of China, according to the 4Q2018 update of CW Research’s Global Cement Trade Price Report (GCTPR).
Trade prices for gray cement also recorded a mild decline over the fourth quarter, despite a year-on-year increase.
“Adverse weather conditions, stagnating demand, and the depreciation of national currencies against the US dollar are some of the reasons attributed to the contracting trend in gray cement domestic indices”, notes João Sobrinho, business analyst at CW Group. “Despite a positive outlook for trade prices, a few risks subsist. Currently, the largest threat to growth in the global cement industry continues to be trade protectionism, which, coupled with geopolitical tensions and political uncertainties in key economies, could pose an obstacle to the recovery of cement prices.”
Curbed capacity boosts domestic prices in China
In China, the average ex-works price of cement surged almost 20 percent on a yearly basis. Increasingly tighter environmental regulations led to a significant reduction of cement capacity, thus translating into favorable pricing when compared to the same period in 2017.
In Algeria, the domestic cement market is no longer undersupplied. With cement production continuously increasing and surpassing demand, cement prices are continuing to decrease.
As for the US, cement ex-works prices inched down on a year-on-year basis, a contraction mainly driven by the adverse meteorological conditions that plagued the region.
In the UAE, ex-works prices for cement hiked 23 percent compared to the same period the previous year, due to an increase in cement demand. On a quarter-on-quarter basis, ex-works prices slipped as a result of a tough competitive environment.
FOB prices poised to recover
In the quarter ended in December 2018, global average trade prices for gray cement inched down to USD 60.8 per ton when compared to 3Q2018.
During the fourth quarter of 2018, Turkey, Japan, and Canada were among the top exporting markets of the commodity, with Turkey emerging as the world's largest gray cement exporter, accounting for nine percent of the total trade.
In the upcoming three months, most regions are expected to record an increase in gray cement FOB prices, with the exception of Eastern Europe, North America and Caribbean, and Scandinavia and the Baltics. The Asia-Pacific-Japan region is projected to witness the biggest price hike, with trade rates forecast to top USD 50 per ton.
Asia-Pacific-Japan leads clinker and slag exports
In 4Q2018, white cement export volumes slightly declined to 1.4 million tons, when compared to the previous quarter. Likewise, on a quarterly basis, FOB prices for white cement are estimated to have recorded mild contractions in markets such as Asia-Pacific-Japan, and the Mediterranean Basin. Conversely, regions such as Western Europe and the Middle East have witnessed an estimated price increase of 11.7 percent and 4.2 percent, respectively.
As for clinker, over the fourth quarter, global trade volumes rose over 14 percent on a quarter-on-quarter basis, an increase that was even more significant as compared to the same period the previous year. In 4Q2018, global average clinker trade prices are estimated to have reached USD 38 per ton in 4Q2018 for a set of 23 countries. During the period, Asia-Pacific-Japan is once again estimated to have been the world’s largest clinker exporting region.
Regarding slag, in the quarter ended in December 2018, global export volumes improved to over six million tons when compared to 3Q2018. Similarly, average FOB slag prices recoded an upward trend on a quarterly basis, being estimated to have reached USD 15.4 per ton in 4Q2018. Asia-Pacific-Japan remained the world’s leading exporting market for the commodity, having accounted for over 60 percent of the total trade during the quarter.
The Global Cement Trade Price Report (GCTPR) 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