FOB prices for cement and clinker continued to drop in August in the Mediterranean Basin region, while prices slightly rebounded in the Persian Gulf and Arabian Sea area in the month, reveals the CW Research’s Cement and Clinker Price Assessments for Med Basin and Persian Gulf.
FOB prices for prompt deliveries of both bulk ordinary Portland cement and clinker diverged on a regional basis with prices in the Mediterranean Basin decreasing by about one percent month-on-month in August, to more than USD 40 per ton and around USD 26 per ton, respectively. Whereas in the Persian Gulf and the Arabian Sea region prices showed a commensurate increase on a month-on-month basis.
Carolina Pereira, CW Group’s Manager, Advisory & Research, observes: “While prices have generally continued on a downward trajectory, as producers remain keen to pass on the costs of operating plants at low utilization rates during the lockdowns, this is being counterbalanced by customers’ needs as demand slowly returns to or in some cases exceeds pre-pandemic levels. The pace at which trade movements return to normal is also impacting price developments for cement and clinker regionally”.
Egypt cement sales regain momentum in June
Egypt’s market was facing an oversupply scenario, but in June it gained some momentum, rising by 42 percent compared to the previous month, and one percent year-on-year, mostly due to the restart of construction activities.
Cement sales in Portugal remain strong, growing year-on-year in June, while cement demand fell in Spain in the first half of the year. In Morocco, sales also decreased in the January-July period. Meanwhile, Turkish cement exports continued to grow in June, and exports to France registered a large increase of about 65 percent in June.
Uzbekistan to expand its cement production capacity by 2021
In Uzbekistan, the growing demand for cement have caused the country to plan a 60 percent increase in its production capacity by January 2021. A total of ten cement plant projects across eight of the country’s regions, which are due to completion up to 2021, will increase the country’s capacity to 20 million tons per year.
Export prices for Portland cement in August in the Persian Gulf-Arabian Sea region increased about one percent compared to July, reaching their highest level since May. Clinker trade prices in August slightly contracted, maintaining the downward trajectory. In East Africa, CFR prices for bagged ordinary Portland cement also saw a month-on-month recovery in August. Average future tanker oil prices for Persian Gulf also increased by 14 percent in July.
Cement exports from Saudi Arabia surged by 26 percent in July, and domestic sales also improved during the month, signaling a normalization in the country’s activities and a decreasing effect of the pandemic. Pakistan’s cement and clinker export volume also increased robustly, by 56 percent on a year-on-year basis in June.
In terms of shipping at a global level, the Baltic Dry Index improved one percent in mid-August to 1,595 points, compared to the level of the end of July 20, driven by stronger demand across all vessel segments. Prospects for the shipping industry are improving as demand slowing rebounds and the worst of the disruptions caused by the pandemic seems to be over, at least for now.
The Cement and Clinker Price Assessments for Med Basin and Persian Gulf are part of CW Research's price assessment series for tradable commodities. The report offers prompt cargo (next 30-60 days deliveries) pricing insights, regular monitoring of the market and an overview of key developments that are crucial for those involved in the cement, clinker and petcoke trade to understand. The monthly price assessments synthesize key market information based on CW Research analysts' ongoing interactions with market participants, including traders, exporters, buyers and other stakeholders involved in the cement, clinker and petcoke trade.
Find out more about the report here.