Construction Saudi cement prices under pressure as competition mounts By Pramod Kumar April 10, 2024, 5:46 AM Pexels.com/Soly Moses Cement companies face price challenges due to decreased demand and heightened inventory levels in 2023 Strong competition among Saudi Arabia’s cement companies is likely to continue and will exert pressure on prices in the short to medium term, according to a report from investment advisory company Ubhar Capital. There is ongoing optimism regarding the pipeline of mega and giga projects, as well as anticipated investments related to Expo 2030. However, slower than expected demand in the real-estate sector has impeded cement offtake, Ubhar Capital said in its first quarter and 2024 corporate earnings estimates. NewsletterGet the Best of AGBI delivered straight to your inbox every week NewsletterGet the Best of AGBI delivered straight to your inbox every week Any recovery is expected to be gradual, it added. The industry’s inventory of clinker – a nodular material used as a binder in cement products – stood at 40 million tonnes, the highest since August 2020. Ubhar Capital views the stockpile “unfavourably”, particularly in a high-interest-rate environment, as holding costs are likely to be elevated. Saudi Arabia scales down plans for 170km Line by 2030 Nakheel’s 3D concrete printing project seen as catalyst Mega-projects to cushion Mena cement makers from global blows Last year, cement companies faced price challenges due to decreased demand, heightened inventory levels and intensified market competition. Petrochemical pressures Ubhar Capital anticipated that the GCC petrochemical industry will experience a challenging environment until the first half of 2024. This is due to global economic uncertainties including a potential recession, extended periods of higher interest rates, a sluggish recovery in China and ongoing conflicts in West Asia and the Red Sea region. Although demand for petrochemical products weakened in 2023, a resurgence is expected following the first half of 2024, particularly in Asia. “Beyond the first half of 2024, we expect stability in the sector and anticipate favourable pricing trends driven by the demand for end products such as plastic packaging, textiles and footwear,” the report said. Register now: It’s easy and free AGBI registered members can access even more of our unique analysis and perspective on business and economics in the Middle East. Why sign uP Exclusive weekly email from our editor-in-chief Personalised weekly emails for your preferred industry sectors Read and download our insight packed white papers Access to our mobile app Prioritised access to live events Register for free Already registered? Sign in I’ll register later
