Mexico-based multinational cement maker Cemex expects its energy costs, including for fuel like petroleum coke, will continue to decrease in the fourth quarter, in line with a trend of decreasing prices since the third quarter of 2023.
The cement maker's fuel costs declined by 23pc during the January-September period compared to the same period last year on a per tonne of cement basis, the company said today. Less volatile and relatively low prices for coke compared with recent years were a major underlying factor, with Argus' 6.5pc sulphur fob US Gulf coast coke assessment averaging $63.72/t during the January-September period, down by 37pc from the same nine months in 2023. The company also attributed the decline in fuel costs to "the increased use of lower cost and lower carbon fuels" and a "continued reduction in clinker factor."
"We have seen this cost trending down since the third quarter of 2023 and expect this to continue through year-end," Cemex chief financial officer Maher Al-Haffar said.
Cemex maintained its full-year 2024 guidance for a high single-digit percentage decrease in the energy cost per tonne of cement produced compared with 2023.
But the cement maker adjusted its guidance for full-year cement sales volumes downward from its second quarter projections. Cemex now anticipates a low single-digit percentage decrease on the year in full-year 2024 cement volumes instead of the flat to low single-digit increase it guided for in the second quarter.
Cemex's cement sales volumes decreased by 4pc to 11.25mn t in the third quarter compared with the same period last year. Inclement weather in the US and in Mexico disrupted the cement maker's sales volumes, with precipitation totals in parts of both markets rising by more than half from the third quarter of 2023. Cemex estimates that 50pc of the third-quarter decrease in cement volumes in the US and 40pc of the drop in cement volumes in Mexico was related to poor weather.
In Europe, third-quarter cement sales volumes increased by 2pc on the year after nine quarters of consecutive decline, as lower interest rates and improved economic activity drove more demand for construction.
The company's revenue totaled $4.09bn in the third quarter, down by 6pc from the same quarter in 2023.
Investment in growth focused on US
Cemex is increasing its investments in developed markets, particularly in the US and in Mexico, with plans to make bolt-on and margin enhancement investments in addition to small and mid-sized mergers and acquisitions.
Part of the funding for the investments comes from the company's plans to sell some plants, with $2.2bn worth of divestments expected to close before the end of the year.
Cemex completed the sale of its Guatemala plant in September, boosting the company's earnings in the third quarter.
Even so, the cement maker's profit totaled $1.34bn in the third quarter, down by 10pc from the same period last year.
The company's narrower focus on the US comes as multinational cement maker Holcim is preparing to spin off and list its North American business in the US in 2025. But when asked about the possibility of listing its North American business in the US, Cemex said it "would prefer not to speculate on whether we're looking at a particular strategy versus another at this point in time."
