CEMEX Q3 2014 - read into product pricing in CaliforniaCEMEX is PLS's marketing partner in SF BAY; CEMEX released and reported 2014 Q3 today:
- cement pricing stronger in the US
- volume in cement and RMX both up +4% 2014Q3 v 2014Q2
- strength in industrial and commerical (where national spending is up 13%)
- resi up (less)
- Highways marginally higher (<1%)
- resi permits in CA up +8% (good leading indicator) - best in US
- agg pricing:
- +11% first 9 months of 2014 v first 9 months of 2013
- +9% Q3, 2014 v Q3, 2013
- flat, sequentially q3,2014 v q2,2014 (explained by mix and product issues)
- cement pricing
- summer (1 August) price increases in CO and FL have stuck
- 1 October price increases in TX and CA, "look good"
- 2015 price increases announced
- still pushing value over volume mantra - seeing healthy vol recoveries pushing cement capacity utilization higher and therefore contribution margin from cement looking quite healthy
- RMX pricing is strong over the (m, comp Q and sequential Q (+2%)
Aggman's take: US was Cemex's bright spot - its 4 biggest markets CA,TX, AZ, FL all doing well from volume and pricing perspectives. I'm not surprised by flat pricing in agg on sequential quarters - seeing they are pushing price increase on 1 October - i.e. at start of Q4. the comparable q's and 9M comparisons with +9% and +11% are more meaningful.
Candidly, you can't get granular into NoCal or SFO Bay pricing when they discuss Cali (because they have a big operational footprint in SoCal and central valley) - so PLS pricing for the Q may have improved in q3 from 1%-5% over q2 - but its more meaningful to compare with 2013 Q3, and looking at 9 months comps - to get a more comprehensive, and meaningful read on pricing trajectory.
CX are a price leader in their markets - and with volume up, price is being taken higher. Their tonality on California is very good, confident, optimistic.