Cement and Clinker Price

Markers: Med Basin, Persian

Gulf-Arabian Sea and East

Africa

3Q2020 Global Cement Trade

Price Report

Webinar presentation

CW Group LLC | T: +1-702-866-9474 | F: +1-928-832-4762 | Connecticut, USA

October 8, 2020

Presenters

2

Juliana VieiraBusiness Analyst

jv@cwgrp.com

M:+351 918 285 753

▪ Executes quantitative analysis for CW Research's price and

volume assessments in the building material and heavy industrial

sectors. Experience in Cement industry.

▪ Degree in International Relations from ESPM, Rio de Janeiro,

Brazil

▪ Responsible for providing qualitative and quantitative analysis for

CW Research. Manages BD for research and consulting projects

in Middle East, Asia, and Africa.

▪ Bachelor’s Degree in International Business and Economics from

Saint Peter’s University, New Jersey, US and a Master of Science

degree in International Business from Seton Hall University, New

Jersey, USA

Prashant SinghAssociate Director

psingh@cwgrp.com

M:+91 887 960 7047

Agenda

▪ Introduction to CW Group

▪ GCTPR 3Q2020 highlights

− GCTPR overview and methodology

− Context snapshot: Worldwide cement demand

− Gray cement exports: pricing trend and outlook

− Ex-works pricing

− Closing remarks

3

4

About the CW Group

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MATERIALS &

CONSTRUCTION

STEEL, METALS &

MINING

CHEMICALS DRY BULK CARGO,

PORTS AND

INFRASTRUCTURE

POWER, ENERGY

AND SOLID FUELS

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technicalNetwork & access Proprietary data

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assessments

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Client Confidential Information

5

GCTPR: 2Q2020 update highlights

What does it include

6

▪ Quarterly reports (annual subscription) with qualitative

analysis on volumes, prices and trends in global markets

▪ Benchmark report that provides detailed insights on:

– gray cement, white cement, clinker and granulated slag prices

(US$/ton)

– Import and export prices and outlook

– Regional price indices

– Monthly trade volumes (tonnages)

– Ex-works and retail level pricing (US$/ton)

▪ Market information for key markets around the world

– 70+ countries covered for trading data

– Monthly prices provided at country, regional and global level

▪ Quarterly updates (annual subscription)

- statistical model updated every 2Q and 4Q of the report

- data in Excel (optional)

For a complete listing of focus countries as well as more details visit:

http://www.cwgrp.com/research/research-products/industries/cement-building-

materials/product/1-global-cement-trade-price-report

TPR 3Q2020

% of global trade 75%

Number of markets tracked 49

Forecast error +3M 6%

GCTPR: Country coverage

7

Trade, ex-works, retail

Trade, ex-works

Trade, retail

Trade

Ex-works, retail

Ex-works

Retail

Client Confidential Information

8

Macroeconomic overview

Source: IMF, CW Research

The economic outlook is as grim as grim gets

Global Economic Outlook 2020 (% GDP)

▪ In the latest IMF global economic update earlier this month, the IMF estimates that its baseline

scenario is of a global 4.9 percent contraction

▪ Only China, the world’s second largest economy is expected to show growth of just 1.0 percent

-8.0%

-10.2%

-5.8%

-0.8%

-4.3%

-9.4%

-4.1%-2.5% -3.2%

1.0%

-4.9%

4.5%6.0%

2.4%

7.4%

4.3% 3.7% 3.4%

6.0%

3.4%

8.2%

5.4%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

2020E 2021F

Despite the recovery in freight rates in 3Q, they remain below levels

achieved in the last quarter of 2019

10

Baltic Dry Index

Freight rate trend USD 3Q average QoQ YoY

Handymax rate $486.4 80.6% -10.9%

Panamax rate $855.4 83.8% -17.7%

BDI $1,563.9 151.6% -19.2%

-

1,000

2,000

3,000

4,000

5,000

BDI Index Handysize Supramax ---- BDI 4Q19 average

Source: Bloomberg, CW Research

Client Confidential Information

11

GCTPR: Domestic prices

The Brazilian cement industry defying expectations continues to show a

robust strengthening in prices by 3.4 percent QoQ

12

Cement ex-works price variation 3Q2020 v. 2Q2020 (QoQ change, USD/t price)

-2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0%

Mediterranean Basin

Western Europe

Asia Pacific

Middle East

North and Central America

South America

South Asia

E Europe and CIS

Sub-Saharan Africa

China

13

+15%

YoY % change

in USD/t

-15%

3Q YoY variations hide the true resilience of key markets including

China, which has shown a remarkable turnaround since 1Q2020

Cement ex-works price variation 3Q2020 and 3Q2019 (YoY change, USD/t price)

Recovery of Brazilian

civil construction

industry

Increase in construction

works in the US

Colombian

construction sector

boosted by higher

housing unit sales

Algeria’s dinar

depreciation

added to rise in

inflation and

spill over of oil

crisis

Russian collapse of oil prices due to

a price war with Saudi Arabia

UK reopening

activities, rise of value

of contracts

Prices upward

pressure led by

South India

South Africa’s

construction sector

saw a decline of

33% YoY in 2Q

Slow recovery of

Chinese

construction sector

after a significant

decline due to

lockdowns

Client Confidential Information

14

GCTPR: Trade pricing

The feared contraction in demand has not materialized in KSA with

the industry growing hitherto unexpected by 37 percent YoY

15

Cement demand in selected markets (% YTD growth)

-50% -40% -30% -20% -10% 0% 10% 20% 30%

Peru

Argentina

Spain

Japan

Brazil

Saudi Arabia

Aug Jul Jun

Turkey0.3

Ireland0.2

Denmark, 0.1

Canada, 0.1

White

The Mediterranean Basin displaces Asia-Pacific-Japan to emerge as

the largest cement exporter in 2Q2020

16

Largest traders by volume (mn tons - % represents share of global volume traded during quarter)

Represents

43%

Represents

75%

Represents

64%

Represents

64%

Turkey3.7

Vietnam1.1

Germany0.9

Thailand0.9

Grey

Vietnam5.2

Turkey4.3

Thailand2.4

Japan, 1.7

Clinker

Japan

2.1

Malaysia, 0.5

India, 0.4

Brazil, 0.3

Slag

▪ Gray cement prices are

expected to increase 3

percent when

compared to 2Q2020

17

▪ Clinker prices are

expected to increase 1

percent when

compared to 2Q2020

The increase in cement and clinker prices highlights the demand

recovery after a challenging first half of the year

CW price index for clinker (USD/ ton)

CW price index for gray cement (USD/ ton)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Volume Average Price

0.0

10.0

20.0

30.0

40.0

50.0

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Volume Average Price

The US and Brazil are driving an increase in FOB prices, while China

enters the traditional growth quarter for the cement in Q4

18

Middle East

Regional gray cement FOB price change (QoQ percent change – 4Q2020 vs 3Q2020)

-1%

3%

North America

& Caribbean

1%

Eastern Europe

& CIS

0%Mediterranean

Basin

1%

Scandinavia &

Baltics

0%Asia Pacific

Japan

-1%

Western Europe

2%

Sub Saharan

Africa

5%

South

America

3%

China

GCTPR 2Q2020 update: Closing remarks

▪ Turkey remained the largest exporter of gray and white

cement, while Vietnam is the largest trader of clinker and

Japan retains the lead for slag

▪ In the 3Q2020, on a yearly basis, ex-works prices

showed wide regional variations, with China showing a

remarkable turnaround

▪ Cement and clinker prices have increased over the last

few months on the back of a demand recovery

▪ The CW index for gray cement is expected to strengthen

across key regional markets, including the Americas and

China while the Med Basin remains stable

19

About CW ResearchCW Research is a leader in syndicated and data-driven market research solutions. The company offers independent

perspectives on multiple industrial market segments(e.g., cement, metals & minerals, and specialty chemicals) and

deep functional expertise in market intelligence, sourcing intelligence, commodity pricing intelligence.

CW Research also provides custom industry and competitive research programs for operating companies, financial

analysts, consultants, governments, suppliers and many others as well as tailored studies together with CW Advisory.

For more information: research.cwgrp.com.

Contacts

CW Group LLCPO Box 5263, Greenwich,

CT 06831 USA

T: +1-702-866-9474

F: +1-928-832-4762

www.cwgrp.com

Prashant Singh

Associate Director

psingh@cwgrp.com

Juliana Vieira

Business Analyst

jv@cwgrp.com

Liviu Dinu

Market Services &

Marketing Consultant

ld@cwgrp.com