Saudi cement demand rises in 2011

An upsurge in construction activity boosted cement demand in Saudi Arabia in the first few months of 2011 and growth is projected to continue through the year, the Gulf Kingdom’s largest bank has said.
 
Production in May soared by around 19 per cent to 4.46 million tonnes compared with the same month of last year, National Commercial Bank (NCB) said.
 
“Saudi cement demand has been on the rise this year driven by a pickup in construction activities,” said the study, sent to Emirates 24/7.
 
It showed clinker production by the 13 locally listed companies produced nearly 3.85 million tonnes in May, around 494,000 tonnes more than April’s production, marking a 12.8 per cent increase.
 
“So far this year, cement factories have been struggling to meet demand despite increasing production levels,” the report said.
“Furthermore, cement exports have witnessed a staggering increase as they surged by 44.7 per cent during the first five months of 2011…this was mainly due to Al-Jouf as it tapped into regional markets, shipping out 172,000 tonnes.”
 
The report showed local deliveries consist of 97 per cent of production for both cement and clinkers, highlighting the short supply experienced in the market.
 
It said higher demand pushed prices upwards as the price per bag of cement reached SR20, adding that the increase has prompted the Saudi Ministry of Trade and Industry to intervene and set prices at SR14.
 
“As the second quarter comes to an end, corporate earnings are expected to reflect positively. An additional company, Hail Cement, is set for an initial public offering later this year. This will help meet demand requirements as we do foresee growth to continue for the remainder of 2011.”
 
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