OREANDA-NEWS  Stagnation in the construction industry has led to a decrease in cement production in Russia, as expected: its consumption in the first quarter decreased by 5-8%. Coupled with a surplus of capacity and an increase of one and a half times the volume of imports of products, this may lead to the shutdown of three or four cement plants, market participants admit. The main hopes of manufacturers are for government orders. Its volumes are still small, but the very need for cement, according to experts, is decreasing, including due to the development of alternative technologies.

In January, according to Soyuzcement (which unites large industry holdings), 2.6 million tons of cement were produced across the country, which is 11.3% less year-on-year. In February, according to forecast data, 3.2 million tons were produced, which is 5.9% less year-on-year. The decrease in production volumes was caused by a reduction in consumption, which in January amounted to 8.1%, to 2.5 million tons, in February — 8.6%, to 3.2 million tons. For the entire first quarter of 2023, consumption decreased by 5% year-on-year, although a year ago, on the contrary, there was a double-digit growth, said Vladimir Guz, managing partner of SMPRO.

Soyuzcement does not expect a recovery in consumption growth throughout this year, following which, according to the baseline scenario, it will decrease by 10% in the whole country, according to the pessimistic scenario — by 20%. SMPRO also predicts a decrease in cement consumption in Russia this year by more than 10%. Soyuzcement associates this with stagnation in the construction industry. In January, Russia really launched half as many new projects as a year ago (see Kommersant of February 27). "The negative dynamics will continue and will affect all segments of the construction industry," agrees Denis Usoltsev, head of the Technical Marketing Department of Tsemros. The only exception, according to Soyuzcement analysts, so far has been the Far East, where cement output in January increased by 19% due to a significant volume of construction.