CEMENT AND CONCRETE MARKETS GLOBAL OUTLOOK
Transcript of CEMENT AND CONCRETE MARKETS GLOBAL OUTLOOK
13 JUNE 2017
Koen Coppenholle, Chief Executive, CEMBUREAU
CEMENT AND CONCRETE MARKETS
GLOBAL OUTLOOK
MAGFORUM 2017, KRAKOW
Today: 29 Members (27 full Members and
2 Associate Members)
Full Members = national cement
industry associations and cement
companies of the European Union
(with the exception of Malta and
Slovakia) plus Norway, Switzerland
and Turkey
Croatia and Serbia are Associate
Members of CEMBUREAU
Cooperation agreement with
Vassiliko Cement (Cyprus)
CEMBUREAU THE EUROPEAN CEMENT ASSOCIATION
N
PL
CH
S FIN
UK
IRL
E P I
F
B L
NL D
GR TR
A
CZ
RO H
EST
DK LV
SI HR
BG
LT
RS
CY
A LOCAL INDUSTRY
THE CEMENT SECTOR
Capital intensive / long investment cycles
CO2 intensive in manufacturing
CO2 low and energy efficient in application
limestone clinker cement
Decarbonation
70% of
emissions
(process)
+ fuel emissions to heat kiln
cement
(10%-15%)
water
(15%-20%)
aggregates
(65%-75%)
+ + = =
concrete sustainable
construction
TACKLING TOMORROW’S CHALLENGES
INFRASTRUCTURE
USD 3.3 trillion annual
investment needed
URBANIZATION
55% of citizens globally
live in urban areas;
66% by 2050
(adding 2.5 bn,
mainly in Asia/Africa)
CONCRETE
IS ESSENTIAL
- LOW CARBON
PRODUCT
- ENERGY EFFICIENT
- CO2 EFFICIENT
- DURABLE
- SAFE & RESILIENT
CLINKER & CEMENT
PRODUCTION
AT START OF INNOVATIVE
SUPPLY CHAIN
- Alternative fuel use
- Novel cements
- Clinker substitution
- Breakthrough CCU
THE ENVIRONMENT IN WHICH WE OPERATE
• Geopolitical instability: Arab countries; Ukraine; EU (Brexit; Future of Europe);
Paris Agreement ?
• Consolidation? Yes, but… top 7 share in global capacity has remained almost
unchanged + new entrants in Middle East, Africa, South East Asia
• Cyclical recovery has stalled at 2%/yr (from 7%/yr 2008-2013) / global capacity
rates at 70%
• China cement consumption slowing down
WORLD CEMENT PRODUCTION
China [VALUE]%
Japan [VALUE]%
India 5.9%
Asia (excl. China, India, Japan) P
[VALUE]%
Africa P [VALUE]%
USA [VALUE]%
America (excl. USA) P
[VALUE]%
Oceania P [VALUE]%
CIS P [VALUE]%
CEMBUREAU [VALUE]%
Europe (excl.
CEMBUREAU) E [VALUE]%
WORLD CEMENT PRODUCTION 2015
BY REGION AND MAIN COUNTRIES % • Global cement production:
4.6 bn tonnes
• Construction markets grow
EU 28 + 1.7%(2016); + 2.7% (2017)
US : +1.1% (2016); 4.6% (2017)
• Cement consumption recovers Euroconstruct data: + 1% (2016); + 2.4% (2017); + 3.5% (2018)
• 47 Mt exports; 20.5 Mt imports (2015)
SHORT TERM MACRO ECONOMIC DATA REAL GDP 2008 Q4 =100 - 2016Q4
92
94
96
98
100
102
104
106
108
110
112
114
200
8Q
4
200
9Q
1
200
9Q
2
200
9Q
3
200
9Q
4
201
0Q
1
201
0Q
2
201
0Q
3
201
0Q
4
201
1Q
1
201
1Q
2
201
1Q
3
201
1Q
4
201
2Q
1
201
2Q
2
201
2Q
3
201
2Q
4
201
3Q
1
201
3Q
2
201
3Q
3
201
3Q
4
201
4Q
1
201
4Q
2
201
4Q
3
201
4Q
4
201
5Q
1
201
5Q
2
201
5Q
3
201
5Q
4
201
6Q
1
201
6Q
2
201
6Q
3
201
6Q
4
EU28 France Germany
Italy Spain UK
Source: Eurostat / Cembureau
EU28: INDICES - INDUSTRIAL PRODUCTION,
CONSTRUCTION PRODUCTION, CEMENT MANUFACTURING
50.0
60.0
70.0
80.0
90.0
100.0
110.0
120.0
20
06Q
1
20
06Q
2
20
06Q
3
200
6Q
4
20
07Q
1
20
07Q
2
20
07Q
3
20
07Q
4
20
08Q
1
20
08Q
2
20
08Q
3
20
08Q
4
20
09Q
1
20
09Q
2
20
09Q
3
20
09Q
4
20
10Q
1
20
10Q
2
201
0Q
3
20
10Q
4
20
11Q
1
20
11Q
2
20
11Q
3
20
11Q
4
20
12Q
1
20
12Q
2
20
12Q
3
20
12Q
4
20
13Q
1
20
13Q
2
20
13Q
3
20
13Q
4
20
14Q
1
20
14Q
2
20
14Q
3
20
14Q
4
20
15Q
1
20
15Q
2
20
15Q
3
20
15Q
4
20
16Q
1
20
16Q
2
20
16Q
3
20
16Q
4
Industrial Production Index
Construction Production Index
Cement Manufacturing Production Index
Capacity top cement producers worldwide 2016
ASIA LEADING THE PACK…
Lafarge Holcim
HeidelbergCement
CEMEX
UltraTech Cement
(India)
Votorantim
(Brazil)
BuzziUnicem
(Italy)
EuroCement
(Russia)
CRH
(Ireland)
DangoteCement
(Nigeria)
InterCement
(Brazil)
Source: Statista
Lafarge Holcim
HeidelbergCement
CEMEX
Italcementi
EuroCement
(Russia)
Votorantim
(Brazil)
Cement manufacturers based on market share worldwide (2015)
Anhui Conch
China Resources
Taiwan Cement
Source: Statista
CONSOLIDATION IN CHINESE CEMENT MARKET
The Chinese Cement association has asked to speed up consolidation of the
local cement industry to the Ministry
• Consolidate 10% of country’s cement capacity in 10 producers by 2020
• Supply – demand balance would require 390 Mt/yr cut in production capacity
and 130,000 jobs in the next 5 years
• Existing producers will pool USD 3 bn in Restructuring Fund
Source: Global Cement, 28 September 2016
MODERATE CEMENT CONSUMPTION GROWTH IN
EUROPE
CEMENT CONSUMPTION GROWTH
EASTERN EUROPE 2004-2019 CEMENT CONSUMPTION GROWTH
WESTERN EUROPE 2004-2019
... COMPARED TO EMERGING MARKETS
CEMENT CONSUMPTION GROWTH
CHINA 2004-2013
CEMENT CONSUMPTION GROWTH
INDIA 2009-2017
EU 28: RATIO OF CONSTRUCTION INVESTMENTS
IN % OF GDP 2006 - 2015
12 12.2
12
11.1
10.5 10.4 10.1
9.8 9.8 9.7
6 5.9 5.7
5.2 5 4.9
4.7 4.5 4.6 4.6
6 6.3 6.3
5.9 5.5 5.6 5.5
5.2 5.2 5.1
0
2
4
6
8
10
12
14
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total Construction Residential Dwellings Other Building and structures
CEMENT INTENSITY OF THE CONSTRUCTION
SECTOR
CEMENT DEMAND FORECAST 2017
ROBUST GROWTH
NEGATIVE
GROWTH
MODEST GROWTH
NO GROWTH
NO GROWTH
STRONG
GROWTH
NEGATIVE
GROWTH
STRONG
GROWTH
INFLUENCING FACTORS
Recent
market
drops but
volatile
Net growth
MdwT
We’re in for
volatile trading
(OPEC + shale
gas demand-
supply)
Demand
from
India/China
Firm price
level in most
grades
FREIGHT CRUDE OIL
PETCOKE
CEMPROSPECTS CONFERENCE
ALTERNATIVE FUEL USE
Thermal Energy consumption by fuel type Breakdown of alternative fuels 2014
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