Sharp slowdown in Saudi demand

Cement demand in Saudi Arabia has considerably slowed through 2013, effectively boosting clinker stocks to a record high level. After recording a high growth rate of some 10 per cent in 2012, expansion of Saudi’s cement market decelerated to around three per cent in 2013, according to Zamil Al Mugren, chairman of Saudi committee for national cement companies, quoted in the daily Aleqtisadiah. 

He said sales by the country’s 15 cement companies were cut by almost 30 per cent after the government’s amnesty in May allowed foreign workers violating labour laws to leave the country. The ensuing shortage in expatriate workers, needed to transport cement bags, particularly affected the bagged cement segment of the market. 

In addition, an official at the ministry of trade and industry was quoted in the daily Okaz that cement prices have fallen to one of the lowest levels, SAR12-13.50 (US$3.20-3.60) per bag and denied that prices had reached SAR27 (US$7.20).

“It is impossible for prices to reach that level in such a situation as locally produced and imported cement is more than enough for the market while clinker stocks have reached their highest level of more than 13 million tonnes,” the unnamed official said.