Egyptian market sees higher utilisation rates in 3Q19

Egyptian cement has seen a recovery in its 3Q19 sales. Total dispatch volumes in 3Q19 for 20 cement companies researched by Naeem Holdings were up 6.3 per cent QoQ, while utilisation rates rose to 73 per cent compared to 69 per cent in 2Q19.

According to the research house the companies that witnessed improved utilisation rates are Arabian Cement, Misr Beni-Suef, and Suez Cement (HeidelbergCement group) with rates of 85, 98 and 67 per cent, respectively.

On the other hand, prices are likely to have remained under pressure during 3Q19, impacted by continued market oversupplies. Currently, the army's new plant in Beni Suef contributes close to eight per cent of total industry volumes sold, with cement utilisation rates likely to have amounted to around 24 per cent, reports Daily News Egypt.

South Valley Cement company recorded the poorest performance among peers on a QoQ based on both cement utilisation and clinker production rates. Cement sales volumes dropped by about 18 per cent QoQ as utilisation rate declined to 41 per cent.

Despite the drop in coal prices, margins  are forecast to remain flat on the back of the offsetting decline in cement prices, accompanied by cost increases associated with the latest round of energy subsidy cuts that took place in July 2019.