Saudi Arabia's cement sector witnessed a slowdown in February and private players' market share fell month-on-month for the first time since June 2009, according to a report issued by NCB Capital.
However, the bright spot was the rise in the kingdom's cement exports by 7.4 per cent m-o-m, after three consecutive months of decline to 130,000 tonnes in February compared with 121,000 tonnes in January, it said.
Additionally, on a year-on-year basis, cement exports grew by 103.1 per cent from 64,000 tonnes. As of 21 March, the cement sector index was up 10.5 per cent year-to-date versus a 9.8 per cent increase on the Tadawul All Share Index (TASI).
But the month also saw a slowdown in y-o-y cement sales volume growth compared to January the same year. Clinker stock levels continued to fall, although as a percentage of monthly sales, there was a slight increase to 278 per cent, said the Saudi Arabia Cement Sector monthly report.
Cement and clinker sales volumes including exports for February stood at 3.62 million tonnes, reporting an increase of 22.9 per cent y-o-y. However, volumes declined 5.2 per cent m-o-m compared with 3.81 million tonnes in January. Production decreased 7.2 per cent m-o-m to 3.46 million tonnes, resulting in a fall in cement stock. Additionally, clinker production declined for the second consecutive month to 2.85 million tonnes, down 5.7 per cent on January.
"While Najran Cement's market share is at an all time high of 6.5 per cent, the other three private companies saw a decline in market share. Amongst listed companies, Yanbu reported the biggest increase in market share m-o-m, up 1.3 per cent to 9.5 per cent," noted the report.
Saudi Arabia has 12 cement companies with an estimated annual cement production capacity of 48 million tonnes. In February, total cement sales volumes in the kingdom stood at 3.41 million tonnes as against 3.63 million tonnes in January and 2.85 million tonnes in February last year. Only three companies exported cement during the month - Saudi Cement, Eastern Province Cement and Northern Region Cement.
"In February, cement and clinker sales volumes in Saudi Arabia were up 19.4 per cent y-o-y to 3.43 million tonnes compared to 2.88 million tonne in February last year. However, m-o-m sales volumes fell 5.7 per cent compared to 3.64 million tonnes in January.
While Yanbu cement reported the highest increase in domestic cement sales on a m-o-m basis, it was the only company to report a decline in sales volumes on a y-o-y measure. The majority of companies reported a decline in sales on a m-o-m basis," said the report.
Clinker stock at the manufacturer level decreased four per cent m-o-m to 9.84 million tonnes for the second consecutive month, as a result of a decline in clinker production. On the other hand, on a y-o-y basis, clinker stock increased by 19.4 per cent. Cement stock declined by 14.3 per cent and 31.5 per cent on a m-o-m and y-o-y basis respectively, as the majority of cement companies reported a decline in the stock maintained.
Clinker stock as a percentage of sales increased to 278 per cent compared to 273 per cent in January. Companywise, Qassim Cement continues to hold the lowest clinker stock at 55 per cent as a percentage of February sales. On the other hand, among the listed companies, Southern Cement replaced Saudi Cement as holder of the highest clinker stock percentage at 500 per cent of February sales.
In February, six companies lost domestic market share to six companies. Yanbu Cement was the biggest gainer of the month increasing its share by 1.3 per cent. On the other hand, Arabian Cement, another player in the western region, was the biggest loser of the month with market share falling by two per cent, said the report.
"The winners were Yanbu Cement (1.3 per cent), Saudi Cement (1.2 per cent), Najran Cement (0.6 per cent), Tabuk Cement ( 0.28 per cent), Qassim Cement (0.27 per cent) and Southern Cement (0.2 per cent),
The losers were Arabian Cement (minus two per cent), City Cement (-0.9 per cent), Yamama Cement (minus 0.4 per cent), Eastern Cement (minus 0.3 per cent), Riyadh Cement (minus 0.2 per cent) and Northern Cement (minus 0.03 per cent). The new players' market share fell for the first time since June 2009 by 0.6 per cent to 19.9 per cent.