The slowdown in Saudi Arabian cement sales continued in January 2014, falling short of analysts expectations.
Cement deliveries amounted to 4.62Mt in the first month of the year, compared to 4.74Mt the month before, a recent report by NBK Capital has said.
Deliveries in November, and to a lesser extent, December 2013 were effected by the expulsion of 2m illegal expatriate labourers by the government which led to the suspension of construction projects and delays in the transportation of cement. NBK Capital had expected the demand situation to gradually return to normal in the first quarter of this year, but so far results sales have disappointed. NBK Capital still expects these challenges to be temporary and the market will eventually return to normal, however this could take slightly longer than originally expected.
Clinker inventories stood at 14.9Mt in January compared to 14.7Mt in December 2013. Crucially, inventories are back above the three months’ production level, which are considered "advisable" by the Saudi government. As a result, clinker imports dropped and amounted to 0.83Mt compared to 1.13Mt in December 2013 (-26.3 per cent MoM).
