South African cement sales rose by 12,1% year-on-year (y/y) to 862 252 tonnes in February, ending two months of slowing y/y increases.
In November 2004, South African cement sales surged by 26,1% y/y to a record 1 103 317 tonnes, but this slowed to a 7,8% y/y increase to 724 051 tonnes in December 2004 with a further easing to 7,1% y/y increase to 605 290 tonnes in January 2005.
The slow demand in December and January due to builders’ holidays allowed the cement producers to restock their inventories ahead of the return of normal demand from February onwards.
Cement sales in South Africa rose by 17,4% in 2004 to a record 10,69-million tonnes compared with a 7% rise in 2003.
Exports however declined by 14,1% to 1,32-million tonnes after a 10% drop in 2003.
Total cement sales rose by 12,8% to 12-million tonnes, less than 15% short of nominal capacity of 13,5-million tonnes. Some cement producers have started expansions, but these are only expected to come into production in 2007.
Last year the Cement & Concrete Institute expected sales to grow between 5% and 8%, and this year sales growth is forecast at between 8% and 10%.
South Africa is currently experiencing a housing boom with South African house prices increasing by 32,6% y/y in December.
This brought the annual average increase to 32,1% for 2004 compared with 21,5% in 2003, according to South African commercial bank Absa’s monthly house price index.
November 2004 was the third consecutive month that South African cement volumes have exceeded one million tonnes in a month after this milestone was reached for the first time in June 2004. In June 2004, cement sales surged by 31,5% y/y to a then-record 1 002 377 tonnes.
In 2003 domestic cement sales grew by 7% to 9 105 466 tonnes after increasing by 5,9% to 8 511 851 tonnes in 2002 following only 1,8% growth in 2001.
The rise in cement sales in 2003 and 2004 was only partly explained by usage in preparing the port at Coega in the Eastern Cape, where cement sales more than doubled (up 109,7%) in February 2004 after increasing by 79,8% y/y in December 2003 and a 151,2% y/y surge in August 2003. Third quarter 2003 sales were up 109,7% y/y in the Eastern Cape and were up 105,4% y/y in the first quarter of 2004. I-Net Bridge