Drop in cement sales in Brazil slows down in 1st Qtr, sector sees chance of growth in 2nd tri

SAO PAULO (Reuters)-Brazil's cement-producing industry hopes to get a sales growth in the second quarter over a year earlier, marking the first positive result of the indicator since the beginning of 2015, said on Monday the President the Association of manufacturers of raw material, Snic, Paulo Camillo Penna.
The sector closed the first quarter of this year with the fall of 3%, to 12,593,000 tons, a performance that fell short of the expectations of the entity before a system of intense rains in the North and Northeast in the period that hindered the progress of sales.
"We're seeing with absolute clarity that we are on course to recovery," said Penna. "In 2017, closed in fall of 6,7% and we are expecting growth of 1 to 2% this year (in sales)," he added. "The route is charted, recovery in the next quarter I must announce that the sector was stable or registered some growth," said Penna.
The President of the Snic cited optimism for a reduction in the number of properties taken back by banks and in stocks of construction companies and developers. "This gives us room for imagining that there are some initiatives of resumption, albeit slowly, but the construction".
In addition to banks and industry stock, Penna said the behavior of the rebar sales in Brazil and reduction in the fall in sales of building materials and in the decline of resources of savings for buildings. Latest data from the Brazil Steel Institute (IABr) indicate growth of 5% in the production of long steel in the first quarter over a year earlier, with domestic sales rising almost 13%.
According to the President of the Snic, the deceleration of the drop in sales of cement in the country is occurring based on recovery in construction of buildings, which took a participation of 85% in demand for cement in the country at the end of the quarter. The remainder is being required by mobility in cities like Sao Paulo, Penna said.
Of the total of cement sold in the first quarter in Brazil, the Southeast was responsible for 6,083,000 tons, slight expansion of 0,9% in annual comparison. The region was the only one to register growth in the period. The largest declines occurred in the North (14,3%) and northeast (10,2%). In the Midwest, there was the fall of 1,3% in the sale and, in the South, retraction of 2,1%.
Penna commented that the proportion of cement demand in the best moment lived by the industry in the country, between 2006 and 2012, was 75% to buildings and 25% for large infrastructure works.
Despite the projected growth planned for 2018, the cement industry in the country will continue with almost half of your capacity of about 100 million tons per year idle. In 2017, the idleness was 46,4%, something that can fall to 45% this year if sales growth projection is confirmed.
Penna said the country today has 13 cement factories paralyzed. In the State of São Paulo, which has 13 production units, are 6 stops. "Companies are not able to put the prices (cement) in the market and the following costs going up," said the President of the Icns.