Saudi Arabia volumes down 19% in 7M17

Saudi Arabia’s cement sales volumes have dropped by 19 per cent YoY to 28.3Mt during the first seven months of 2017, a report from Al Rajhi Capital reveals.

The Saudi Cement sector report added that inventories stood at 33.6t. However, it pointed out that when looking at capacities, inventories and potential demand for each region, the northern region remains the weakest as current inventories represent 118 per cent of regional producers’ dispatches in the last 12 months.

For the western and southern regions, recent capacity additions have added to existing oversupply, the report added. For the central region, 2Q selling prices were lower than in the western region as it was more accessible to producers despite favourable locations and low inventories compared to other regions.

In the eastern region, producers were impacted after implementing export fees on Bahrain exports. However, these exports are likely to restart after a 50 per cent discount on fees.

Going forward, volatility and stiff competition on selling prices are likely to continue in the sector, given the slowdown in construction activities and limited demand from megaprojects. (Source: ME Construction News)