Cement manufacturers Lafarge, Holcim and Carpatcement Holding, which share an around one billion-euro market, are keeping prices at the same level, whereas brick, ACC and reinforcing steel manufacturers have operated price cuts of 10-15% due to the consumption decline.
Cement manufacturers say, however, that they may adjust prices in spring, if demand continues to fall.
At the end of last year the price of cement went down as much as 50%, from a record high of 140 euros per tonne in the summer, but only distributor prices, as they had to sell the large stocks accumulated following the reduction in consumption. What kept producers from also operating price cuts?
Cement consumption hit a record level in 2008, of around 600 kilos per capita, equivalent to 13 million tonnes of cement, double as much as in 2005, which allows for the absorption of the full production capacity on the market.
According to information from producers, the average price currently ranges from 340 to 380 RON/tonne (79-88 euros/tonne), the same level as the one recorded at the end of last year.
"The prices of our products were modified on January 1st, 2008, when the new buy-sell contracts became effective. After this date, Carpatcement has not operated any further price modification," say Carpatcement Holding representatives. The company will renegotiate the prices at the beginning of spring, when a price cut may occur.
A price reduction is also considered by Holcim representatives. "We may have to adjust the price of cement over the coming few months because of the depreciation of the Romanian currency and the adjustments in electricity, labour and raw material costs. Solid fuels and some of the raw material necessary to manufacture cement are purchased in foreign currency," said Markus Wirth, general manager of Holcim Romania.
Cement producers posted rises above initial estimates in 2008, of 10 to 30% due to the large number of real estate and infrastructure projects underway. The cement market will see its first year of falling demand in 2009 due to the significant decline in real estate investments amid the international financial crisis. The leading players have not given definite estimates as to the progression of cement consumption, but 2009 will definitely not see the 20-30% rises of the last few years.
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