A Small Rebound Seen in Indonesia's Cement Consumption in October
After experiencing slowing growth in recent months, Indonesian cement sales in October 2013 increased 7.9 percent (year-on-year) to 5.58 million metric tons according to data from the Indonesia Cement Association (ASI). As such, cement sales rebounded from the 5.3 percent growth (yoy) in the previous month. The October growth rate was mainly caused by increased cement demand from islands other than Java. In particular, demand from Sumatra rose significantly. Indonesia's second most populous island bought 1.15 million tons of cement.
Despite Indonesia's GDP growth having slowed to 5.62 percent in the third quarter of 2013 (yoy), increasing cement sales in October suggest that there has been a small surge in property and infrastructure projects as both components account for almost 100 percent of the country's cement demand. Although cement demand increased more in the islands outside Java, the latter continues to account for most cement demand. In October, Java - Indonesia's most populous island - bought 3.2 tons of cement, equivalent to 57 percent of the nation's total cement consumption.
In the January-October 2013 period, cement sales in Indonesia rose 5.8 percent to 47.2 million metric tons.
| 2012 January-October |
2013 January-October |
Growth | |
| Domestic Cement Sales in million tons |
44.6 | 47.2 | +5.8% |
Source: Indonesian Cement Association
The outlook for Indonesia's total cement sales for the year 2013 had been revised down last month by the Indonesia Cement Association (ASI) from 61 million metric tons to 58 million metric tons amid the nation's current deteriorating macroeconomic context, which includes slowing GDP growth, higher interest rates, high inflation and a depreciating rupiah exchange rate.
Total Cement Production and Consumption of Indonesia:
| 2010 | 2011 | 2012 | |
| Cement Production in million tons |
37.8 | 52.0 | 60.6 |
| Cement Consumption in million tons |
40.8 | 48.0 | 55.0 |
Source: Indonesia Cement Association