Cement trade is caused by various reasons. The main reason is the changing world economy. Cement consumption is highly dependent on economic growth. The growth of cement consumption is usually several times as big as the increase in economical growth.
As construction of new cement plants is slow, a rapidly growing cement demand can exceed local production capacity and create a shortage. In such cases imports are required. The opposite can be true as well. A slowdown in economical growth in general will cause a large slowdown in cement demand. This can mean that production capability substantially exceeds local demand. Exports in many cases then are a requirement. With changing world-wide economies the world-wide trade flows of cement are changing as well.
Another reason for cement trade is the vertical integration in the cement and concrete industry. Cement producers are buying ready mix plants and concrete product plants. This ensures their cement sales. The result is however, that in many cases independent ready mix and concrete product companies are forced to buy cement from their competitors. This quite often results that they source cement from international markets, i.e., they import cement themselves either directly or indirectly.
A very large portion of international cement trade (probably more than 80%) is controlled by the large multinational cement producers. They have the capability to source cement from their plants with excess capacity and direct this cement to their own markets overseas with a shortage. This gives them a huge advantage. Cement trading for them is also a key tool to get a foothold in areas where they are not yet present. Most of the large groups have their own trading companies.
As global cement trade exceeds 100 million tons per year the remaining "free" market is still reasonably sizeable. There still is a reasonable number of independent exporters, importers and traders.
Cement trade is a highly specialised profession. It requires a knowledge of the global market, a technical knowledge of cement quality and consistency of quality. It requires a knowledge of logistics and economics of the combined trade, transportation and terminals issues. It requires experience in the politics, trials and tribulations, that go with the business.
More information on cement trade can be found in the following articles. -
Some trading companies (multinationals and independents) can be found on our
links page.
Or, for any specific questions: Contact us