Cement and ClinkerWebinar

Price presentation

Markers: Med Basin, Persian

Gulf-Arabian Sea and East
Africa
3Q2020 Global Cement Trade
Price Report
October 8, 2020

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

Presenters

▪ Responsible for providing qualitative and quantitative analysis for

Prashant Singh CW Research. Manages BD for research and consulting projects
in Middle East, Asia, and Africa.
Associate Director
psingh@cwgrp.com ▪ Bachelor’s Degree in International Business and Economics from
Saint Peter’s University, New Jersey, US and a Master of Science
M:+91 887 960 7047
degree in International Business from Seton Hall University, New
Jersey, USA

▪ Executes quantitative analysis for CW Research's price and

Juliana Vieira volume assessments in the building material and heavy industrial
Business Analyst sectors. Experience in Cement industry.
jv@cwgrp.com ▪ Degree in International Relations from ESPM, Rio de Janeiro,
M:+351 918 285 753 Brazil

2
Agenda

▪ Introduction to CW Group
▪ GCTPR 3Q2020 highlights
− GCTPR overview and methodology
− Context snapshot: Worldwide cement demand
− Gray cement exports: pricing trend and outlook
− Ex-works pricing
− Closing remarks

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About the CW Group

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technical

CEMENT, BUILDING
MATERIALS & STEEL, METALS & CHEMICALS DRY BULK CARGO,
PORTS AND
POWER, ENERGY
CONSTRUCTION MINING
INFRASTRUCTURE AND SOLID FUELS

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Client Confidential Information

GCTPR: 2Q2020 update highlights

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 What does it include
▪ Quarterly reports (annual subscription) with qualitative
analysis on volumes, prices and trends in global markets
▪ Benchmark report that provides detailed insights on:
– gray cement, white cement, clinker and granulated slag prices
(US$/ton)
– Import and export prices and outlook
– Regional price indices
– Monthly trade volumes (tonnages)
– Ex-works and retail level pricing (US$/ton)
▪ Market information for key markets around the world
– 70+ countries covered for trading data
– Monthly prices provided at country, regional and global level
▪ Quarterly updates (annual subscription)
- statistical model updated every 2Q and 4Q of the report
- data in Excel (optional)

TPR 3Q2020
% of global trade 75%

Number of markets tracked 49

Forecast error +3M 6%

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

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GCTPR: Country coverage

Trade, ex-works, retail

Trade, ex-works
Trade, retail
Trade
Ex-works, retail
Ex-works
Retail

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Client Confidential Information

Macroeconomic overview

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 The economic outlook is as grim as grim gets
Global Economic Outlook 2020 (% GDP)
2020E 2021F
10.0% 8.2%
7.4%
6.0% 6.0% 5.4%
4.5% 4.3% 3.7%
5.0% 3.4% 3.4%
2.4%
1.0%
0.0%
-0.8%
-5.0% -2.5% -3.2%
-4.3% -4.1% -4.9%
-5.8%
-10.0% -8.0%
-10.2% -9.4%

-15.0%

▪ In the latest IMF global economic update earlier this month, the IMF estimates that its baseline
scenario is of a global 4.9 percent contraction
▪ Only China, the world’s second largest economy is expected to show growth of just 1.0 percent

Source: IMF, CW Research

 Despite the recovery in freight rates in 3Q, they remain below levels
achieved in the last quarter of 2019
Baltic Dry Index
BDI Index Handysize Supramax ---- BDI 4Q19 average
5,000

4,000

3,000

2,000

1,000

Freight rate trend USD 3Q average QoQ YoY

Handymax rate $486.4 80.6% -10.9%

Panamax rate $855.4 83.8% -17.7%

BDI $1,563.9 151.6% -19.2%

Source: Bloomberg, CW Research

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Client Confidential Information

GCTPR: Domestic prices

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The Brazilian cement industry defying expectations continues to show a
robust strengthening in prices by 3.4 percent QoQ
Cement ex-works price variation 3Q2020 v. 2Q2020 (QoQ change, USD/t price)

China

Sub-Saharan Africa

E Europe and CIS

South Asia

South America

North and Central America

Middle East

Asia Pacific

Western Europe

Mediterranean Basin

-2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0%

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 3Q YoY variations hide the true resilience of key markets including
China, which has shown a remarkable turnaround since 1Q2020
Cement ex-works price variation 3Q2020 and 3Q2019 (YoY change, USD/t price)

Russian collapse of oil prices due to

a price war with Saudi Arabia
UK reopening
activities, rise of value
of contracts

Increase in construction
works in the US Algeria’s dinar
depreciation
added to rise in
inflation and Slow recovery of
spill over of oil Chinese
Colombian crisis construction sector
construction sector
after a significant
boosted by higher
decline due to
housing unit sales
lockdowns
YoY % change
in USD/t Prices upward
pressure led by
-15%
South India

Recovery of Brazilian South Africa’s

civil construction construction sector
industry saw a decline of
+15% 33% YoY in 2Q

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Client Confidential Information

GCTPR: Trade pricing

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The feared contraction in demand has not materialized in KSA with
the industry growing hitherto unexpected by 37 percent YoY
Cement demand in selected markets (% YTD growth)

Aug Jul Jun

Saudi Arabia

Brazil

Japan

Spain

Argentina

Peru

-50% -40% -30% -20% -10% 0% 10% 20% 30%

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The Mediterranean Basin displaces Asia-Pacific-Japan to emerge as
the largest cement exporter in 2Q2020
Largest traders by volume (mn tons - % represents share of global volume traded during quarter)

Represents
Represents 75%
43%
Japan, 1.7
Thailand
0.9
Thailand Represents
Germany 2.4 64%
0.9

Vietnam Represents
1.1 64% Brazil, 0.3
Turkey
4.3 India, 0.4
Canada, 0.1
Malaysia, 0.5
Denmark, 0.1
Ireland
Turkey 0.2
3.7 Japa
Vietnam
5.2 n
Turkey 2.1
0.3

Grey Clinker White Slag

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The increase in cement and clinker prices highlights the demand
recovery after a challenging first half of the year
CW price index for gray cement (USD/ ton)
Volume Average Price
7,000 70.0

6,000 60.0

▪ Gray cement prices are

5,000 50.0

expected to increase 3
percent when
4,000 40.0

3,000 30.0

2,000 20.0
compared to 2Q2020
1,000 10.0

0 0.0

CW price index for clinker (USD/ ton)

Volume Average Price
7,000 50.0

▪ Clinker prices are

6,000

40.0

5,000

4,000
30.0

expected to increase 1
percent when
3,000
20.0

2,000

1,000
10.0

compared to 2Q2020
0 0.0

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The US and Brazil are driving an increase in FOB prices, while China
enters the traditional growth quarter for the cement in Q4
Regional gray cement FOB price change (QoQ percent change – 4Q2020 vs 3Q2020)

Scandinavia & Eastern Europe

Baltics & CIS

1%
Western Europe 1%
-1%
China
3% 0%
Mediterranean 3%
Basin -1%
0%
Asia Pacific
North America
Middle East Japan
& Caribbean

5%
2%
South
America
Sub Saharan
Africa

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GCTPR 2Q2020 update: Closing remarks

▪ Turkey remained the largest exporter of gray and white

cement, while Vietnam is the largest trader of clinker and
Japan retains the lead for slag
▪ In the 3Q2020, on a yearly basis, ex-works prices
showed wide regional variations, with China showing a
remarkable turnaround
▪ Cement and clinker prices have increased over the last
few months on the back of a demand recovery
▪ The CW index for gray cement is expected to strengthen
across key regional markets, including the Americas and
China while the Med Basin remains stable

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About CW Research
CW Research is a leader in syndicated and data-driven market research solutions. The company offers independent
perspectives on multiple industrial market segments(e.g., cement, metals & minerals, and specialty chemicals) and
deep functional expertise in market intelligence, sourcing intelligence, commodity pricing intelligence.
CW Research also provides custom industry and competitive research programs for operating companies, financial
analysts, consultants, governments, suppliers and many others as well as tailored studies together with CW Advisory.
For more information: research.cwgrp.com.

Contacts

Prashant Singh Juliana Vieira Liviu Dinu

Associate Director Business Analyst Market Services &

Marketing Consultant
psingh@cwgrp.com jv@cwgrp.com ld@cwgrp.com

CW Group LLC
PO Box 5263, Greenwich,
CT 06831 USA
T: +1-702-866-9474
F: +1-928-832-4762
www.cwgrp.com