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
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
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
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
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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
Client Confidential Information
4
About the CW Group
CEMENT, BUILDING
MATERIALS &
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assessments
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5
Cement and Clinker Monthly Price
Assessments
Client Confidential Information
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
Client Confidential Information
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
Client Confidential Information
100
Aug-16 Sep-16 Oct-16 Nov-16 Dec-16
8
Cement and clinker price assessment: Mediterranean Basin
-4.4%
100
Aug-16 Sep-16 Oct-16 Nov-16 Dec-16
-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
Client Confidential Information
Cement and clinker price assessment: Persian Gulf- Arabian Sea
9
100
Aug-16 Sep-16 Oct-16 Nov-16 Dec-16
100
Aug-16 Sep-16 Oct-16 Nov-16 Dec-16
-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
Client Confidential Information
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%
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
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
-16.8%
-29.2%
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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
Client Confidential Information
12
GCTPR: 4Q2016 update highlights
Client Confidential Information
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
Client Confidential Information
GCTPR: Country coverage
14
Client Confidential Information
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
Client Confidential Information
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)
Client Confidential Information
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)
Client Confidential Information
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
Client Confidential Information
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
Client Confidential Information
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%
Client Confidential Information
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
Client Confidential Information
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
Client Confidential Information
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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