FOB prices for cement and clinker have faced slim decreases in February, according to CW Research’s Cement and Clinker Price Assessments for Med Basin and Persian Gulf.

However, cement manufacturers in select markets remain optimistic about an improvement in the midterm.

In February, FOB prices for bulk ordinary Portland cement decreased slightly month on month in the Persian Gulf and Arabian Sea region, while prices for prompt deliveries of bulk ordinary grade clinker also recorded a slim contraction.

According to Ana Almeida, Analyst with CW Research: "Expectations for higher levels of exports coming from Saudi Arabia are likely to bring some relief to the country's stockpile. For the moment, however, the region continues to struggle with that matter."

Cement demand levels in Saudi Arabia continue slipping, having recorded a single-digit contraction in December. Over that month, cement dispatches by Saudi companies declined to 4.1 million compared with 4.4 million tons in the same month a year ago. Nevertheless, Saudi cement producers are making plans to export this year. According to the National Cement Companies’ Committee, the domestic market will export around two million tons in 2018. At least nine companies are interested in selling their products abroad.

Spanish economic recovery bringing optimism to cement producers

Meanwhile, in the Mediterranean Basin region, FOB prices for prompt deliveries of both bulk ordinary Portland cement and clinker registered a slim decrease when compared to the previous month.

Commenting on the price development, Ana Almeida noted: "In the Med Basin region, cement and clinker producers are facing strong competition, mainly in the North African region. However, sporadic shortages in some countries can be seen as opportunities in the next months."

In Turkey, cement producers continue to struggle with the rise of the thermal coal prices, as rates are reaching an unprecedented peak since 2014. In Spain, although cement consumption in 2017 is expected to have reached a new high since 2012, the 12.3 million tons figure is still far from the levels recorded before the economic downturn. Nonetheless, for 2018, cement manufacturers remain confident in their country’s economy and in a subsequent improvement in the cement sector.

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