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Unstable cement prices make it difficult to budget for projects

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Cemex dominates Mexico’s cement trade. Photo: Facebook

Mérida, Yucatán — With cement prices up 12-20 percent since July, contractors are struggling to work within their budgets or to provide accurate estimates.

Dozens of municipal parks projects, which began earlier in the year, are a good example of the chaos caused by these price fluctuations.

Builders signed contracts with the city before the price increase, and are now being told to absorb the extra cost of supplies, according to Sipse.

Estimates were signed off before the July price hike, said the city public works director, Virgilio Crespo Méndez.

In total, 130 million pesos have been invested in 140 parks this year. More than half are getting new exercise and play equipment, lighting, gardens and irrigation systems.

A park dedicated to actor Pedro Infante, and another honoring the charitable Vifac civil association, are still on track to be completed in December.

Allowing more cement imports would help stabilize cement prices, said Carlos Erosa Burgos, the president of the Colegio de Ingenieros Civiles de Yucatán.

Erosa Burgos said that in the first half of 2017, the construction industry was seriously affected by the excessive price hikes.

He said that Cemex’s nationwide monopoly over the supply of cement has forced half of all construction projects to go over budget. Cement from Cuba, the Philippines, China or India is much cheaper than Mexican cement, but imports are often blocked. 

Cement prices dropped at the beginning the year, during a brief period when Cuban imports successfully made it through Customs, said Erosa Burgos.

“At this moment it is impossible to budget a project,” he lamented.

Construction companies have openly asked the government to end the Cemex monopoly.

Cemex, which is based near Monterrey and listed on the New York Stock Exchange, is the world’s third-largest cement producer.

Cemex made news earlier this year after its shares went up on speculation they would supply materials for a Donald Trump-mandated border wall.

The conglomerate was silent on the issue for a while, but under public pressure, a company spokesman said Cemex will not bid on any part of the project.

Analysts have estimated that about US$1 billion worth of concrete and cement will be required for the wall, and Cemex, with its cement plants on both sides of the border, would have been well poised to be a major supplier.

But in Mexico, some have said participating in the wall’s construction would be equivalent to an act of treason.

Source: Sipse, Revista Yucatán, Los Angeles Times

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