2025, Brazil's cement industry got off to a "good start" with sales of 15.6 million tons, up 5.9% year-on-year, continuing the recovery momentum of 2024. This growth is mainly due to the government's investment in infrastructure, the recovery of real estate demand and the decline of unemployment rate to a ten-year low of 6.8%. But behind the bright data, the industry is facing multiple pressures such as high interest rates, rising costs and overcapacity, and its annual growth expectations have been lowered to 1-1.5%.
Growth momentum: Policy dividend and infrastructure long-term cycle
The "My Home, My Life" (MCMV) program led by the Brazilian government has contributed 50% of the new housing in the country, driving the continuous release of demand for low-end building materials. In 2025, the plan will raise the upper limit of household income to 12000 reals (about 18000 yuan), and new demand is expected to be released centrally in the next three months. In the field of infrastructure, 75 billion reals of investment in sanitation facilities has been started, and projects such as sewage treatment plants will enter the peak period of cement consumption in 2027-2028. At the same time, the concrete road reconstruction plan adopts the "white topping" technology, covering more than 170 cities, and the road life is extended to 30 years, which is especially suitable for the reconstruction of agricultural products transportation trunk lines.
Hidden worries: cost pressure and credit crunch
The high benchmark interest rate has led to soaring mortgage costs. In the first two months of 2025, the number of housing loans plunged by 49.3% compared with the same period last year. The capital pool of the SBPE savings and loan system relied on by the construction industry has shrunk. The production side is also under pressure: energy costs account for more than 50% of cement production costs, while Brazil is suffering from the worst drought in history, pushing up electricity prices; the promotion of carbon market regulations may increase emission costs, and only 30% of enterprises in the industry have realized biomass fuel substitution. In the labor market, the shortage of skilled workers in the construction industry is 23%, the debt ratio of 75% households is close to the warning line of 50%, and the consumption of residents is turning to non-building materials.
Green Transformation: Technological Innovation and Carbon Pricing Game
Industry leader Waterland Ting issued the first sustainable development bond, and CSN integrated low-carbon production capacity through acquisition. The government plans to issue detailed rules on carbon emission reduction of cement before COP30, focusing on the promotion of alternative materials such as calcined clay and slag cement. Ecocem of Ireland has received 4 million euros from the European Union to develop electric arc furnace slag cement, and LKAB of the United Kingdom has cooperated with Forterra to produce recycled calcined clay from waste bricks. These technological paths may reshape the global supply chain. However, the uncertainty of carbon tax policy puts enterprises in a dilemma between short-term cost increase and long-term competitiveness cultivation-if the current draft, the cost of cement production will increase by 3-5 US dollars per ton.
Regional differentiation and capacity restructuring
benefited from the growth rate of mineral development in the northern region, the demand for flood reconstruction in the southern region was released, and the problem of overcapacity in the southeastern region was prominent. The ratio of clinker storage capacity in China reached 54.02%, the ratio in Northeast China rose by 3 percentage points, and the utilization rate of production capacity was lower than 55% for a long time, far below the warning line of 73.7% overcapacity. Accelerated reshuffle of the industry: the top three enterprises, including Waterland, Inter Cement and Holcim, accounted for 49.7% of the market share, and small and medium-sized manufacturers eliminated inefficient production lines through the "capacity replacement" policy.
Future outlook: Breaking through
the gap between policy and market The Brazilian Cement Industry Union predicts that the growth in the second half of the year will be constrained by the high interest rate and fiscal tightening. The key variables are: if the interest rate is lowered to single digits, it may release 2 million tons/year of demand; the implementation of the carbon pricing policy may trigger the withdrawal of 30% of small and medium-sized enterprises; Inflation pass-through in the US could push up the cost of imported coal by 5-8%.
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