Saudi clinker production declines

Clinker output in Saudi declined by 12 per cent YoY in May 2015 in producers deliberately attempt to shore up cement prices, claims a report by NCB Capital.

Stockpiles had built up partly as a result of decrees by the late King Abdullah to ensure the country did not run out of supplies. In April 2013, the king also set aside US$800m for the import of volumes and construction of kilns to boost supplies. However, new regulations introduced later in the year to reduce the number of illegal foreign workers led to hundreds of thousands of workers leaving the kingdom, causing widespread project delays. 

Consumption has not been able to keep pace with demand since leading to some companies in more remote regions began undercutting in busy cities such as Riyadh and Mecca, according to a report by Business – The National (UAE).

“We believe cutting production aims to control supply and price discounts,” the English-language daily newspaper quoted NCB Capital analyst Mohamed Tomalieh as saying. The reduction has helped bring clinker inventory levels down to 19.4Mt from a record high of 21.4Mt in December.