Cement Sector to Bounce Back, Prices on the Rise

The Federal Government’s emphasis on building concrete roads across the country may hike cement costs to N9,000 per 50-kilogram bag from the present N5,500.

According to Cardinal Stone, cement manufacturers may prioritise providing to government contractors for concrete construction, thus raising prices. Cement prices are projected to remain high in 2024 as producers seek to cover operational costs, foreign market volatility, and inflation.

The analysis notes the likelihood of a price war after BUA Cement reduced its ex-factory pricing, but it also predicts that overall cement prices would stay high in the first quarter of 2024. The cement business experienced numerous challenges in 2023, including currency fluctuation and excessive rains, which contributed to a turbulent year.

Despite BUA Group’s announcement to lower cement prices in October, prices have not dropped. The research emphasises the importance of cement in construction, which acts as a binding substance. The greater usage of natural gas in production and distribution is predicted to lower operational costs for cement manufacturers.

The paper continues by forecasting that the use of natural gas and a global drop in its price will alleviate cost pressures on cement producers and distributors. Furthermore, it suggests that using natural gas instead of AGO for distribution could reduce existing distribution costs.