Hanson Cement comment: Q1 2016

Keith Ellis, Commercial Director Hanson Cement is BMBI’s Expert for Cement & Aggregates.

Cement and aggregate sales in line with other Mineral Product Association products were generally flat over the first quarter despite annual sales being positive. In the twelve months to March 2016, aggregates, ready mixed concrete and mortar sales rose just over 3% compared to the previous twelve months.

Despite a slight slowdown in the commercial and industrial sectors, infrastructure continues to perform well. The market is predicted to grow faster than other sectors over the next few years with projects such as Hinkley Point Nuclear Power station, HS2 rail connection, high rise buildings in Canary Wharf, Thames Tideway Tunnel and a planned government £15.2 billion road investment scheme.

This year builder’s merchants are seeing a growing demand from builders for plastic packaged cement in response to increasingly wet conditions and waste issues. Although paper bags with plastic lining keep cement in good condition for up to 6 months, builders pay a premium for a plastic packed product. Merchants are also beginning to see the advantage of being able to store cement outside in their yards to free up more valuable space in store.

Despite an early Easter, sales of packed aggregates increased well ahead of last year, and the demand for packed mortars and other ready-to-use cementitious products is strong and is expected to continue.

Sustainability and the environment are key issues facing the cement industry. There are challenges ahead with the implementation of Phase 4 of the EU Emission Trading Scheme (EUETS) in 2020, which is designed to reduce CO2 emissions. It’s expected these changes, amongst other things, may lead to increasing the replacement levels of additions such as GGBS, limestone and PFA in bulk and packed cements over the next few years to reduce associated CO2.

These changes and others in combination could increase the cost of production over the next few years.

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