Impact of Covid-19 on Latin America’s Cement Industry

Impact of Covid-19 on Latin America’s Cement Industry

Following the World Health Organizations’ assertion of Covid-19 as a global epidemic, businesses across the world have had a major impact. Moreover, economies have had to face major setbacks. One major industry to be affected is Latin American cement industry. The Latin American region is at a separate stage of economic development, with cement industry of fluctuating size and ages. Corporations within the existing industry are uniting the struggle against the coronavirus epidemic by extending a helping hand many ways, together with participating in public space cleaning drives. Corporations are using their mixer trucks,which in Latin America have high ability, to carry soap and water in public environment where more rigorous cleaning is needed so as to prevent the spread of Covid-19.

Fall in Demand for Cement in the Current Years

“A rising number of construction companies have stated they will pause all non-essential work to help fight the coronavirus, but others continue to functionamidstperplexity over the government's guidance.

- BBC News

The Latin American cement industry has faced disturbed times in the current years. Its largest market, Brazil, has swayed from one political disaster to the other, slowing down its economy to the doldrums. Its construction center has been specifically scandal-plagued – with dreadful outcomes for its cement industry.

It is also true that Latin America is not a uniform market but a number of minor local markets each pushed by their own list of conditions: “Brazil is doing something; Mexico is doing something; Chile is doing something else. It is a diverging market in that sense.”

Brazil is by late the largest market for cement in Latin America: it is also the region’s major problem. In spite of some certainty advancing into this year, demand seems to have deteriorated by about 5% to May. A definite indication that domestic demand has not been acting out as well as cement industries have been of late improving in cement exports.

The latest “confusion round the bend” originated in the form of a truck drivers’ strike, which triggered cement industries to miss supplies and draw attention to one of Brazil’s constant limitations: its transport infrastructure.

Coming to the second main cement market in Latin America, radical transformation is again expected to play a determining role in how the cement market fairs. It is expected that the region would face a rise in the cement’s price, as the producers focus to pass on the effect of any tax increment to the consumers. But this is by means a modest implementation in Mexico; in spring, producers attempted to raise prices but were compelled to back down prior to any protest from the government as well as construction corporations.

But What about the Cement Struggles? Will it ever Resolve?

Fatpos Global anticipates that the global cement market in Latin America is expected to portray a downward CAGR in the coming years. Focusing on the current business scenario and the upcoming projections, the recent trade policy tends to make life much difficult for importers of cements from Mexico. Though not precisely aiming at cement, the cement market is expected to be caught up in this. The precise range of this dispute is difficult to graph.

Disturbance to this trade is clearly another barrier to an industry that has never been without its political headaches in the current years. Even though there remains much possibility in the region, the devil is always in the delivery.