Brazil's Cement Sales Decline in 2023
Brazil's cement industry experienced a decline in sales in 2023, marking the second consecutive year of reduced sales following a 2.8% drop in 2022.
In 2023, the Brazilian cement industry faced a challenging year with a 1.7% decline in sales, amounting to a reduction of 1.1 million tons compared to the previous year. This downturn marks the second consecutive year of declining sales, following a 2.8% decrease in 2022. Despite these challenges, the industry saw a slight increase in December sales, totaling 4.5 million tons, a 0.3% rise compared to the same month in 2022.
The industry's performance in 2023 contrasts with the growth seen in the triennium of 2019-2021, even amidst the pandemic, where it registered increases of 3.8% in 2019, 10.8% in 2020, and 6.8% in 2021. During this period, the sector had recovered 12 million tons of the 19 million lost between 2015 and 2018.
High interest rates throughout 2023, starting at 13.75% and closing at 11.75%, impacted the final cost of mortgage financing, encouraging a shift towards financial product investments and significantly affecting production costs. The real estate sector, a major driver of cement consumption, saw a significant drop in new launches, contributing to the year's negative performance. Data up to September indicated a 16% reduction in new developments and a 6.5% increase in property sales, reducing the stock of construction projects and, consequently, the demand for cement. The number of housing units financed by the Brazilian Savings and Loan System (SBPE) fell by 39% up to October.
Despite the resumption of the "Minha Casa, Minha Vida" housing program in February, its regulation only occurred in June, delaying the program's impact until the second half of the year. The program's share in new launches increased from approximately 30% to 46% in the third quarter.
The Brazilian cement industry is also advancing its commitment to climate neutrality. Internationally, it was the first to commit to climate neutrality on a global scale within the UN's Race to Zero program. The industry is now progressing towards climate neutrality in Brazil, expanding from the Mitigation Roadmap launched in 2019 to include the entire product lifecycle, aiming for sectoral neutrality by 2050.
The performance of the cement industry aligns with the projections of the National Union of the Cement Industry (SNIC), which pointed to the low performance of the housing, sanitation, and logistics sectors, high interest rates, and high household indebtedness.
Source:
Mirian Gasparin