Construction Industry News:

Russian cement industry weathered crisis, output increased 5.6% in former August

According to data from Alliance Cement, Russia's cement consumption reached 41.8 million tons from January to August 2022, a year-on-year increase of 5.6%. Cement production rose 6% over the same period to 4,110 tonnes, although August production did fall 1.7% from the previous month.

In terms of trade, Russia's cement imports fell 4.4% year-on-year to 1.24 million tons, while exports fell 24.6% year-on-year to 679,600 tons. The largest increases in exports were in parts of Georgia in Abkhazia (+395%) and Azerbaijan (+34%), while the largest declines were in Finland (-80%), Belarus (-49%) and Kazakhstan (-17%) ).

The International Monetary Fund (IMF) raised its forecast for the Russian economy in 2022 and now expects the Russian economy to contract by 3.4% instead of the 8.5% forecast in April.

There have also been positive dynamics in domestic housing construction volumes so far in 2022. According to data from the Russian Federal State Statistics Service (Rosstat), housing construction amounted to 69.6 million m2 from January to August this year, an increase of 33.3% over the same period in 2021. While the figure fell by 8% to 9.4 million m2 in September this year, analysts do not expect the trend to continue into the fourth quarter of 2022, with the property market expected to be a key driver of future cement demand growth.

Infrastructure construction will be another growth area heading into the fourth quarter of 2022, with Russia planning large-scale cement purchases to support cement demand. According to analysts, this growth should provide the Russian cement industry with an opportunity to offset some of the losses.

A recent report by Russian building materials analysis agency SMPRO found that despite steady demand for cement and increased production, cement producers faced significant losses. The overall cement production capacity in Russia is estimated at 103 million tons, but the utilization rate of the Russian cement industry is relatively low at about 50%. According to Vladimir Guz, managing partner of SMPRO, the unprofitability of the Russian cement business is due to the fact that domestic cement prices cannot keep up with production costs.

Gennady Rasskazov, vice president of Sibcem, one of Russia's leading cement producers, believes that the overall production cost of Russian cement will rise by 30% in 2022 due to increased costs of diesel, coal, oil, lubricants, etc. Average natural gas prices in the country are about 10 percent higher than at the same time last year. The situation was further complicated by the substantial increase in equipment maintenance costs. According to Mr Guz, repair and replacement of components is becoming more expensive due to the reliance on the price of ferrous products.

Producers continue to face many challenges, including overproduction and over-concentration in some historic cement production centers, such as the Northwest Territories and the Volga Region. Low utilization rates have also pushed up production costs, while gas and electricity prices have soared. The final hurdle is that developers in the construction industry are increasingly turning to various additives as an alternative to cement to help reduce construction costs.

Looking ahead, Russia's cement production is expected to expand to an estimated 62 million tons by 2022, up from 61 million tons in 2021 and 56 million tons in 2020. According to industry analysts, production is expected to slide to 57 million tonnes in 2023, assuming the downside is that continued sanctions adversely affect the internal economy.

TransGrind supply different kinds of diamond tools for concrete floor grinding and concrete floor polishing, as well as stone polishing. We have supplied many different kinds of diamond tools for many customers, such as Scanmaskin tools, Lavina tools, Klindex tools, Husqvarna tools, HTC tools etc. Welcome to know more about our products by clicking below picture to get into our official web if you are interested.