2024, the demand for cement in Brazil continued to rise, with total sales reaching 43 million tons, up 3.1% year-on-year. In August, cement sales reached 6.2 million tons, an increase of about 3.3% over the same period last year. In terms of weekday shipments, Brazil's average daily cement sales in August were 252,000 tons, up 5.6% from the same period in 2023.
In August, cement sales in all regions of Brazil showed an increasing trend. Among them, the northern and northeastern regions performed best, while the southern region showed a downward trend until July, but resumed its growth trend as the impact of the floods subsided. In addition, the central-western and south-eastern regions of Brazil also achieved cumulative growth.
The Brazilian real estate market is the main driver of cement consumption. In the second quarter of 2024, the supply and sales of housing increased thanks to the "My Home, My Life" project, a large-scale social housing project launched by the Brazilian government, which aims to improve the living conditions of the people by providing subsidies and financing to help low-income families own their own homes. The number of houses supplied by the "My Home, My Life" project alone increased by 86.7% compared with the same period in 2023. Affected by this, the sales of building materials and real estate financing in Brazil have shown an upward trend.
In August, Brazil's construction confidence index remained relatively stable for the fourth consecutive month, and construction activity remained relatively active. At present, the shortage of workers has become a major factor limiting the development of the construction industry. In addition, the increase in the benchmark interest rate has also had a negative impact on confidence in the construction industry.
By contrast, the consumer confidence index rose for the third consecutive month in August. The growth of consumer confidence index is mainly attributed to the active labor market and moderate inflation, but the growth rate slowed down in August due to the impact of higher income groups. In
industry, the business confidence index remained stable in August after four consecutive months of improvement. As demand continues to increase and inventory decreases, cement enterprises are still optimistic about the market at the end of the year.
At the macroeconomic level, labor and income indicators are still optimistic, but alarm bells have been sounded on the cost side. Brazil has announced an increase in energy bills due to poor rainfall, which has raised concerns about production costs and logistics in the cement industry. In 2024, Brazil is facing its worst drought on record, which could affect cement sales, especially in northern Brazil. In addition, the recent budget cuts of the Accelerated Growth Plan (PAC) have also increased the uncertainty of the cement industry in the implementation of future infrastructure investment.
Even so, the cement industry is optimistic about the seasonality of product sales. From historical experience, sales performance in the second half of the year is generally better than that in the first half, which may partially compensate for the losses in the past two years.
"The resumption of the sanitation auction and the highway concession announcement are expected to bring incremental demand to the cement industry next year.". Until then, the real estate sector will continue to be the main source of cement consumption in Brazil, driven by the "My Home, My Life" project, said the president of the Brazilian Cement Industry Association.
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