Cement sales fared relatively better in February than in the same period last year. What are the reasons ? And what should we expect in terms of the repercussions of the crisis in Ukraine and the pressure on the price of a barrel of Brent, a critical cost item for an energy-intensive industry such as cement works.
In February 2022, cement deliveries from APC members reached 1.111 million tonnes (MT) compared to 1.079 MT for the same period in 2021, or +2.91%. Cumulatively, at the end of February 2022, deliveries reached 2.239 MT once morest 2.116 MT at the end of February 2021, an increase of 5.81%, indicates the Ministry of National Territorial Planning, Urbanism, housing and urban policy. What explains this increase in sales compared to the same period last year? Contacted by Eco Inspirations, David Toledano, president of the Federation of Building Materials Industries (FMC), explains this sales behavior by drought.
“February cement figures are good. The drought means that construction sites do not stop as was the case last year, hence the increase in sales. But we are still on a “normal trend”.
These figures are published in a context marked by the crisis in Ukraine with the resulting effects on input prices. On the stock market, analysts note a fall in the prices of cement companies and a sell-off observed on their shares, in the wake of the market decline that began in mid-February. The rise in the cost of inputs, in particular the barrel of Brent, a critical cost item for an energy-intensive industry such as cement works, might directly affect their activity.
It should be noted that oil has reached its highest level since the financial crisis of 2008, while the West attacks the Russian energy sector. Oil jumped to nearly $130 a barrel following the United States and Europe said they may consider banning energy exports from the country.
Will cement manufacturers pass on the rise in input prices to the end consumer?
Following the foregoing, it goes without saying that one wonders regarding the conduct that cement producers will adopt. Will they pass on the rise in input prices to the end consumer? It should be noted that real estate developers have been complaining for some time regarding the rising prices of building materials. Heavily impacted by this, the sector is struggling at the start of the year.
On the subject of the impact that the crisis in Ukraine might have on the rise in prices, Toledano, president of the FMC, wants to be more reassuring. “For now, there is no impact on our products. Currently, everyone is trying to resist and see how things will turn out. That being said, there are products such as steel, aluminium, etc. which have been affected, but not the rest. We are still managing to get things under control, hoping that the situation will improve quickly and that this war will stop”.
The real estate sector and unsold stock
In the real estate sector, developers continue to produce, but how are home sales doing? According to the price index of real estate assets for the 4th quarter of 2021, published by Bank Al-Maghrib and the National Agency for Land Registry, Cadastre and Cartography (ANCFCC), the number of transactions increased by 32.8 % in 2021, despite the crisis. For its part, the price of real estate is on a downward trend, but this varies depending on the city. The real estate asset price index (IPAI) fell by 6% in 2021, year-on-year.
Cement deliveries have doubled since 2000 to reach nearly 14 million tonnes by the end of 2021
The industrial system of the members of the APC includes 13 factories and 7 grinding stations, which makes it possible to ensure a regular and continuous supply of the market and to contribute to the national autonomy in a key product for the growth of the country. The last two decades have seen major programs to increase capacity and modernize equipment. With all operational units, cement deliveries have doubled since 2000 with some fluctuations, and stood at nearly 14 million tonnes at the end of 2021.
Modeste Kouamé / ECO Inspirations
