Spanish cement producers going through worst crisis ever

Construction and cement use has ground to a halt. leaving Spain littered with half built developments

Cement use has plunged to new lows as manufacturers are hit by falling demand and rising costs on all fronts.

Cement use fell an annualised 34pc in August, and then 38pc in September; hardly a month goes by without a new record fall in sales. Spanish cement manufacturers say they are going through the worst crisis ever, hammered by plunging housing starts and now falling public works demand as the Government cuts infrastructure programmes to save money.

To make matters worse, electricity prices are rising fast, making Spanish cement manufacturers less competitive, undermining their exports. Cement production is energy-intensive and electricity costs have a big impact on prices.

To put the latest monthly sales volume in perspective, Spanish cement use in September was just over one million tons, which is about the annual production capacity of a typical cement producer, of which there are 35 in Spain. At current levels of demand, there is massive over-capacity, so it’s hard to see how many of them will survive.

“Given that we are starting from a risible sales volume of just fourteen million tons, another double-digit decline in 2013 will put us in a situation that can only be described as a genuine cataclysm for the the Spanish cement industry,” said Aniceto Zaragoza, head of the Oficemen trade body.

Back in the boom years Spain was pouring more cement each year than Germany, France and Italy combined.

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