For the First Quarter of 2022
Cement prices in India increased in Q1 2022, with the rise in demand as well as an increase in the price of key raw materials like pet-coke. The average cement prices across India observed a 10% rise to 395 INR/kg from February to March and a year-on-year increase of 11%. The rise in price came as construction activities witness a seasonal high with increased road projects announced by the government.
According to the Turkish Cement Manufacturers' Association's head, the war in Ukraine affecting the cement producers in Turkey, leading to the sudden increase in the price of Newcastle Coal, causing a serious threat to the business. In early March 2022, the price increased by about 100 USD/MT in a single day. According to the association, the cost of cement produced by a plant that uses imported coal would increase by around 15 USD/MT.
For the Fourth Quarter of 2021
In 2021, the cement sector, which was harmed by a decline in construction activity, started recovering. India had declared that it will meet infrastructure cement demand with several important projects, increasing the capacity of 14 to 15 million MT. With this global backdrop and China's cement industry capacity in oversupply, foreign investment witnessed significant growth in the region. Coal prices jumped dramatically at the end of 2021, as did thermal coal long-coordinate pricing. Owing to this, the manufacturing costs grew dramatically in the fourth quarter. The region witnessed an increase of 19% in prices from the previous year. The average cement prices in quarter four stood at 80 USD/MT.
As a result of Hurricane Ida, several US energy plants were offline in October, causing cement production to delay. The export price in North America on an average, declined by about 4% in the fourth quarter of 2021, compared to the previous quarter. Average cement prices stood at 126 USD/MT in the fourth quarter of 2021.
Despite unfavorable year-over-year comparisons and winter weather in California, cement output and price remained steady moving towards the fourth quarter. To alleviate price pressure, the region is transitioning to blended cement, with companies such as Argos USA currently producing PLC at their US locations in Newberry, Florida, Harleyville, South Carolina, and Martinsburg, West Virginia.
Prices in the region had a brief resurgence with a growth of 4% compared to the beginning of the year. According to the cement organization, the recent announcement of a USD 1.5 trillion infrastructure plan in the United States is projected to affect cement prices and production.
Although infrastructure spending continued to support cement consumption, European economies saw a dip in their once-booming housing markets.
EU subsidies, substantial wage increases, and a pre-election housing boost in Hungary are all key drivers of the industry. With rising interest rates and labor shortages, Poland faced a significant hurdle in transitioning away from coal-fired power facilities.
The French cement sector benefited from a robust resurgence in commercial construction. In the United Kingdom, moderate growth was observed as rising interest rates impacted property demand. The German cement market remained generally stable, with supply chain bottlenecks and lower immigration affecting overall demand. The price in Europe fell by 10% in the fourth quarter of 2021, with average cement prices being 89 USD/MT.
The construction industry was the main sector in Latin America that stabilized economies in the final quarter of 2021. According to SNIC, Brazilian cement sales totaled 4.8 million MT in 2021, up by 1.6 % compared to the same period previous year. The region’s market's growth had been attributed to the continuation of construction and refurbishment through construction, real estate projects, and a tentative resumption of infrastructure projects. In comparison to the previous year, the industry grew by 6.6%. Cement prices were around 100 USD/MT during the fourth quarter of 2021.
For First, Second and Third Quarters of 2021
In 2021, the demand struggled to maintain a high plateau, but gradually descended into a medium trend of fluctuation and decline. Due to the risk of loss induced by new increased production capacity, the prices have remained flat for the previous two years. The prices on the Chinese market increased gradually.
In 2021, 29 production lines with a combined capacity of 48.79 million MT were put in operation, primarily in China.
The resurgence in the construction industries, real estate, and development activities helped elevate the demand in the region. The main stimulus for the cement industry in China, according to China Resources Cement (CRC), were the expanding real estate restrictions.
The Ministry of Industry and Information Technology (MIIT) in China had proposed stricter criteria for cement manufacturers to follow when decommissioning current capacity before establishing new capacity. These policies raised the general cost as producers struggled to absorb increased costs. Because China is the world's largest cement producer, this trend impacted its overall cost.
The rise in pricing was exacerbated by the fact that energy prices in China reached a decade high. There was a 19% growth in cement prices compared to 2020 and the average prices were around 60 USD/MT in 2021.
Cement prices continued to decline in 2021 with the pattern continuing owing to the region also experiencing interruptions as a result of low construction activity and rising fuel and freight expenses. Additionally, some planned industrial and residential expansion projects have been delayed, decreasing the demand even further. The prices improved in 2021 compared to 2020. The industry witnessed a 3% growth in cement prices from the previous year. The imports increased significantly as a result of supply chain constraints affecting domestic output. The production declined owing to technical and environmental issues. The availability of relatively non-expensive cement also led to a decrease in the domestically produced cement in the region in 2021. Even when the overall price declined in the region, the average price in 2021 was around 128 USD/MT, an improvement of 9% compared to the previous year.
Cement production is governed by the EU's increasingly strict emissions trading system in the European Union. Energy prices were a major concern, since the sector's production costs had risen by 25%, and the region's energy prices had been volatile over the past six months in 2021.
Prices rose during the initial quarters of 2021 due to competition from cement importers outside the European Union and the need for a Border Carbon Adjustment Mechanism (CBAM) to compensate for carbon pricing for manufacturers within Europe.
Cembureau, the European cement organization, presented an estimate indicating that if the EU ETS Carbon dioxide cost increased further, it would account for 12 to 15% of cement manufacturers' production costs. The average price in 2021 was around 92 USD/MT, an increase of 7% year on year from 2020. In early 2021, cement prices were around 99 USD/MT, which declined to 89 US/MT by December 2021.
In Europe, the industry walks on a tightrope between remaining financially sustainable and moving towards net-zero emissions.
In South America, sales increased significantly during the coronavirus pandemic, owing to a broad recovery that began in 2020 and relatively lax lockdown measures in comparison to other nations. Companies such as Holcim, CSN Cimentos, Cimentos Mizu, Cimento Apodi, InterCement, and Votorantim all contributed significantly to the region's pricing and demand growth. Demand nearly quadrupled to 6.42 million MT in the first half of 2021 from 3.33 million MT in the same period of 2020 and was much higher than the 4.94 million MT reported in the first half of 2020. Argentina had the highest prices, followed by Nicaragua, Uruguay, Guatemala, and Paraguay, where prices reached about 100 USD/MT. Despite high demand, cement prices in Brazil were lower than in other South American countries.
For the Year 2020
The global pandemic affected the product’s prices in an unprecedented manner. The prices fell sharply during the first two quarters. Towards the end of the year, the prices recovered and stabilized. In China, bad weather also hampered the growth of the industry. Despite the adverse conditions, the production in China grew by 2%, according to the Global Cement Organization. CNMB and Anhui Conch were some of the largest producers who had an increased revenue with an increase in their domestic sales. In 2020, the prices in Asia fluctuated between 50-60 USD/MT
The prices increased by 8% in the third quarter and 3% in the fourth quarter of 2020 and continued to increase after the sudden drop in prices in the first two quarters.
The strict regulations imposed by the Chinese government caused some old factories to reduce or close their units to comply with the new standards. This ultimately had an impact on the prices in the region. Due to strong market control, China's cement industry improved as a result of the elimination of backward production capacity and the improvement of industry concentration, and the overall price also increased.
India also faced similar tribulations during 2020. The production in the country declined along with demand in the first two quarters of 2020. Prices increased by more than 10% towards the end of the year. The price elevation was exacerbated by factors such as power outages and rising coal prices in 2020.
Countries like Vietnam underwent a poor first half reduced prices of the product in 2020 owing to oversupply and decline in their sales volume. The situation improved majorly due to close market tie-ups with China and the Chinese public investment plans.
Hurricanes and tropical storms prompted turnarounds at many cement plants in 2020. The pandemic had a negative impact on the manufacturing industry's price. The pandemic accelerated an already-declining value of residential and non-residential development, lowering demand for industrial commodities in 2020. This affected the cement industry as well. Prices fell 10% in the second quarter of 2020 compared to the first half of the year. In most regions, the production remained below capacity. In 2020, there was a 14% year on year decline in prices compared to the previous and the average prices were recorded around 118 USD/MT, fluctuating between 132 USD to 110 USD/MT.
In April, some cement factories in the United States were shut down due to reduced demand caused by pandemic restrictions. Despite its ongoing infrastructure projects, Canada also saw a drop in demand. The prices were under tremendous pressure due to stringent covid restrictions and demand volatility.
With the cement industry hit severely by the Covid-19 Pandemic in 2020, the region’s prices were disturbed by strict lockdowns in Italy, France, Spain, and the UK. Prices fell initially in the second half of 2020. Owing to stable demand in Eastern Europe and Northern Europe, the prices began to recover. The prices increased by the second half of 2020 in several regions. Government benefits initiatives were coming to an end as a result of rising debt levels. Due to the high cost of emissions, the prices increased. Prices in Europe were around 87 USD/MT in 2020.
Demand for this product in South America was robust in 2020. The consumption in the major countries of Brazil, Colombia, Peru, Argentina, and Chile had been boosted in the first half of the year by building, solid property sales, and the reactivation of public works.
Additionally, consumption increased significantly year over year in 2020 as a result of corporations having relaxed COVID-19 restrictions in the region.
In June, in Chile, bagged cement sales climbed by over 67% year over year and increased by more than 20% since early 2020. While the demand in Brazil had been rising since 2020, COVID-19 caused a sharp decline in demand in Argentina and Peru in the first half of 2020, which then improved due to a recovery in the construction sector, fueled by both private and state activity. The demand climbed by more than 31% month over month and 18% year over year in 2020, increasing by more than 34% from 2019. Price improvements in Brazil and Colombia resulted in a price increase of more than 76 USD/MT in South America in 2020.
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Procurement Resource provides prices of Cement for several regions around the globe, which are as follows:
Cement is a binding material used in building and civil engineering construction that sets, hardens, and adheres to other materials. Hydraulic cements set to a hard mass when combined with water owing to hydration, that is, a chemical combination of the compounds in cement with water. Among different cement types, Portland cement is most widely used across the world. Portland cement is essentially made up of compounds of lime, mixed with silica and alumina.
Cement manufacturing process involves various steps, which starts with mining, crushing and grinding of raw materials like limestone and clay, to a fine powder, called raw meal. The obtained product is then heated in a cement kiln at a temperature as high as 1450 °C. This is followed by clinkerization, cement grinding and storing of the finished product.
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The displayed pricing data is derived through weighted average purchase price, including contract and spot transactions at the specified locations unless otherwise stated. The information provided comes from the compilation and processing of commercial data officially reported for each nation (i.e. government agencies, external trade bodies, and industry publications).