Cement & Clinker prices 4Q2016: Price Assessment and Trade ... Cement Ex... · GCTPR 4Q2016 update:...

Cement & Clinker prices

4Q2016: Price Assessment and

Trade Price Update

Webinar presentation

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

December 15, 2016

Client Confidential Information

Presenters

2

Ana AlmeidaAnalyst

[email protected]

M:+351 913765688

Ana is an analyst for CW Research quantitative and

qualitative analyses

Focuses on primary and secondary research for key reports,

including the cement and clinker price assessments

Stefana AbiculeseiConsulting Analyst

[email protected]

M:+40 753406832

Lead analyst for CW Research’s quantitative analyses and

research, including trade prices, forecasts

Studied Civil Engineering at the Technical University of Civil

Engineering Bucharest

mailto:[email protected]



Agenda

Introduction to CW Group

Cement and Clinker Monthly Price Assessments

− Monthly cement trade price and volumes update

− Closing remarks

GCTPR 4Q2016 highlights

− GCTPR overview and methodology

− Context snapshot: Worldwide cement demand

− Gray cement exports: LT pricing trend and outlook

− Ex-works pricing

− Closing remarks

3


4

About the CW Group

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CONSTRUCTION

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assessments

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Publications

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5

Cement and Clinker Monthly Price

Assessments


Methodology of cement and clinker price assessments

6

Primary research by

engaging in interactions with

traders in the three covered

regions

Aggregating price points

obtained through primary

research

Establishing price markers

for the three regions

Who this report is for

Understanding monthly prices of exported and

imported cement and clinker

Understand tactic and strategic demand drivers

Keep up to date with the cement and clinker trade

Benefits of subscribing to the report

Cement traders

Cement producers

Cement users / buyers

Bulk cargo shippers / charterers


Price assessment series overview

7

Monthly prices for ordinary Portland

cement and ordinary grade clinker

Delivery on a free-on-board basis

(FOB) for prompt cargoes (30-60)

Mediterranean Basin

(FOB)

Twice-monthly prices of imported

petcoke delivered on a cost and

freight (CFR) basis

Compare pricing on an mmBtu basis

to coal

India East Coast (CFR)

India West Coast (CFR)

Persian Gulf-Arabian Sea

(FOB)

East Africa (CFR)

Cement

and

Clinker

Prices

Petcoke

prices


100

Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

8

Cement and clinker price assessment: Mediterranean Basin

-4.4%

100


-3.7%

Fx(U

SD

/TR

Y)

FOB ordinary

Portland

cement bulk:

MedBasin

(US$/ton)

FOB ordinary

grade clinker

bulk: MedBasin

(US$/ton)

2.7

3.6

1-Aug-16 17-Aug-16 2-Sep-16 18-Sep-16 4-Oct-16 20-Oct-16 5-Nov-16 21-Nov-16 7-Dec-16Aug-16 Mid Aug-16 Sept-16 Mid Sept-16 Oct-16 Mid Oct-16 Nov-16 Mid Nov-16 Dec-16 Mid Dec-16


Cement and clinker price assessment: Persian Gulf- Arabian Sea

9

100


100


-15.6%

-13.8%

Fx(U

SD

/PK

R)

FOB ordinary

Portland

cement bulk:

Persian Gulf-

Arabian Sea

(US$/ton)

FOB ordinary

Portland clinker

bulk: Persian

Gulf-Arabian

Sea (US$/ton)

103

106

1-Aug-16 17-Aug-16 2-Sep-16 18-Sep-16 4-Oct-16 20-Oct-16 5-Nov-16 21-Nov-16 7-Dec-16May-16 Mid May-16 Jun-16 Mid Jun-16 Jul-16 Mid July-16 Aug-16 Mid Aug-16 Sept-16 Mid Sept-16


Cement and clinker price assessment: Med Basin and Persian Gulf-

Arabian Sea

10

FOB ordinary

Portland cement

bulk: MedBasin

(US$/ton)

FOB ordinary

grade clinker

bulk: MedBasin

(US$/ton)

FOB ordinary

Portland cement

bulk: Persian

Gulf-Arabian

Sea (US$/ton)

FOB ordinary

Portland clinker

bulk: Persian

Gulf-Arabian

Sea (US$/ton) Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

-5.8%

Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

-19.1%



-16.8%

-29.2%


For more information or to take part in CW’s Price Assessments

11

Participate in PAs

Exchange market color and intelligence with the CW

Research team (anonymously)

The PAs are the result of interactions with traders and

cement manufacturers

Purchase

Subscriptions

Annual electronic subscription for individual, site license and

corporate license

The product is available on a stand-alone basis or as an

add-on option to CW Research’s Global Cement Trade Price

Report

Contact

Contact the CW team at [email protected] or

+1-702-866-9474

Contact Raluca Cercel at [email protected] if interested in

participating in PA calls




12

GCTPR: 4Q2016 update highlights


Global Cement Trade Price Report (GCTPR)

13

MAIN CONTENT

Quarterly reports (annual subscription)

Qualitative analysis on volumes and prices and trends in or

global markets

Benchmark report that allows unique insights on:

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

(US$/ton)

– Import and export prices

– Regional price indices

– Monthly trade volumes (tonnages)

– Ex-works and retail level pricing

Market information for key markets around the world

– 70 countries covered for trading data

– Monthly prices provided at global, regional and country level

9 Months of historical information + next quarter forecast

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

http://www.cwgrp.com/research/research-products/industries/cement-building-materials/product/1-global-cement-trade-price-report


GCTPR: Country coverage

14


Methodology high-light: forecast modeling and gap bridging

Forecast prices estimated from the last available month

to the ending month of the subsequent quarter (e.g.

4Q2016 report will contain forecast prices up to March

2017)

Projections are forecasted using a country-by-country,

product-by-product and flow-by-flow time-series

regression methodology

– R-square values are consistently above 0.95

– Periodically revised statistical model

– Data-gap filling through model and “last tick” pricing

15


Context snapshot: Worldwide cement demand expected pick up on

growth in China and U.S., Brazilian demand remains subdued

16

YTD cement demand growth (%)

• Demand expected to improve with

demand for property and

infrastructure picking up

China

U.S. • Ongoing high demand for building

materials in the United States

Saudi Arabia • YTD sales affected by slowdown in

construction

• Clinker inventories increased

Brazil • Economic downturn keeps cement

volumes subdued

• Volumes rose 6+% QoQ in Q3, but

overall results this year remain

subdued

Highlights

Note*: Cement demand estimated based on production volumes

India • Demand expected to improve on

strong activity in housing and

infrastructure

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

Brazil

Argentina

Saudi Arabia

Japan

Colombia

Canada

Thailand

Spain

United States

China*

India*

Pakistan

Cyprus

YTD (Oct-16) YTD (Sep-16)


Median FOB prices for gray cement seeing signs of shy recovery

17

Global gray cement price index (USD/ ton)

100

200

Jan-1

3

Feb

-13

Ma

r-1

3

Apr-

13

Ma

y-1

3

Jun-1

3

Jul-1

3

Aug-1

3

Sep-1

3

Oct-

13

No

v-1

3

De

c-1

3

Jan-1

4

Feb

-14

Ma

r-1

4

Apr-

14

Ma

y-1

4

Jun-1

4

Jul-1

4

Aug-1

4

Sep-1

4

Oct-

14

No

v-1

4

De

c-1

4

Jan-1

5

Feb

-15

Ma

r-1

5

Apr-

15

Ma

y-1

5

Jun-1

5

Jul-1

5

Aug-1

5

Sep-1

5

Oct-

15

No

v-1

5

De

c-1

5

Jan-1

6

Feb

-16

Ma

r-1

6

Apr-

16

Ma

y-1

6

Jun-1

6

Jul-1

6

Aug-1

6

Sep-1

6

Oct-

16

Median (USD/ton) High price (USD/ton) Low price (USD/ton)


Gray cement FOB prices trending down, some recovery observed in

recent months

18

Global FOB prices for gray cement (USD/ton)

Global gray cement exports (‘000 tons)

20

40

60

80

Global gray cement FOB (USD/ton)

3,000

6,000

9,000

China Thailand Turkey Japan Others


Forecast

FOB rates for gray cement are projected to decline further in most

regions; stable outlook for pricing in N.A. and APJ

19

Regional gray cement export prices (USD/ton)

30

60

90

Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17

Asia Pacific Japan Eastern Europe Mediterranean Basin

North America & Caribbean Scandinavia & Baltics Western Europe


Ex-works prices declined in most major cement markets, some QoQ

increase seen in Brazil, Argentina, Northern India

3Q2016 YoY

-36.0% to -30.7%

-30.7% to -25.3%

-25.3% to -20.0%

-20.0% to -14.7%

-14.7% to -9.3%

-9.3% to -4.0%

-4.0% to 1.3%

1.3% to 12.0%

12.0% to 23.0%

3Q2016 YoY

-36.0% to -30.7%

-30.7% to -25.3%

-25.3% to -20.0%

-20.0% to -14.7%

-14.7% to -9.3%

-9.3% to -4.0%

-4.0% to 1.3%

1.3% to 12.0%

12.0% to 23.0%


Improved pricing environment in the U.S., overcapacity leads to

pricing pressure in China

21

Argentina (USD/ton) Brazil (USD/ton) China (USD/ton)

U.S. (USD/ton)Indonesia (USD/ton)India (USD/ton)

140 140140

140 140140


Oversupply in China expected to ease and prices to increase; Pricing

pressure expected in Indonesia

Region Outlook

Asia-Pacific-Japan China: prices expected to increase

India: increase in prices in North and South

Indonesia: pricing pressure expected

Eastern Europe Russia: unfavorable exchange rates to impact prices

Ukraine: slight increase

Mediterranean Basin Egypt: ex-works pricing to remain volatile

Turkey: stable pricing environment

Greece: market affected by intense competition

Middle East Saudi Arabia: volatile pricing environment

Oman: marginal price increase

North America and The Caribbean U.S.: sales prices most likely to increase further

Mexico: further increases expected in ex-works pricing

South America Brazil: stable or marginal changes in ex-works pricing

Colombia: further increases expected

Western Europe France: prices expected to increase

22


GCTPR 4Q2016 update: Closing remarks

Global average FOB prices for gray cement down 4%

(by USD 2.4 per ton) YoY in 3Q2016

– Quarterly volumes dropped ~11% YoY for the set of reporting

countries with complete data for the quarter (accounting for

+50% of global volume)

– Prices expected to decline further, particularly in W. Europe,

Med. Basin

Clinker FOB rates at -13% YoY in 3Q2016

– Volumes up ~6% YoY for set of reporting countries with

complete data for 3Q2016 (~50% of global volume)

Global slag export prices up 10% YoY in 3Q2016

23

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