Cement is one of the world’s most widely used and traded materials. Yet all attempts to offer futures on it have failed. Ben Beasley-Murray investigates.
Cement. The stuff of dreary, dystopian cityscapes as well as
the key ingredient in any self-respecting gangland thriller.
"Will that be white Portland or a nice Pozzolana mix in your
It’s also been the stuff of futures markets,
being long on promise and hype but short on action.
On paper it’s a no-brainer. With annual
production of over 2bn tonnes, cement is one of the
world’s most significant commodities, and its
price is volatile, buffeted by production capacity and the
strength of demand from the building industry. Although you can
stockpile against price hikes, you nevertheless have the
makings of an accompanying derivatives market.
That appeared to be the thinking when the Moscow Stock
Exchange in November 2007 announced that the following spring
it would launch cement futures. The reason? A building boom and
the Winter Olympics of 2014, in Russia, were stoking demand for
cement. Russian cement prices more than doubled in 2007,
compared with a 16% rise the year before.
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