FOB prices for cement and clinker continued to decline both in the Persian Gulf-Arabian Sea region and in the Med Basin region in September 2020, according to CW Research's Cement and Clinker Price Assessment for Med Basin and Persian Gulf.
FOB prices for bulk ordinary cement in the Med Basin region decreased by 2 percent month-on-month in September and clinker weakened by over 2 percent, whereas FOB prices for bulk ordinary cement in the Persian Gulf-Arabian Sea recorded a 1 percent contraction, to reach over USD 35 per ton and clinker declined more than 1 percent.
“FOB prices remain on a downward trajectory as producers continue to navigate an uncertain market plagued by low utilization rates and intermittent lockdowns. Rebound in demand remains unevenly distributed, but there exist pockets of exception like Saudi Arabia, where manufacturers are witnessing a robust growth in sales,” assessed Carolina Pereira, CW Group’s Manager, Advisory & Research.
Egypt export prices drop in the first half of 2020
Egypt cement export prices dropped by about 23 percent year-on-year in the first six months of 2020, according to the Building Materials Export Council. Losses have affected about 77 percent of the cement companies in the country, where the cement industry is currently suffering from oversupply and weak demand.
Turkish cement exports climbed over 42 percent year-on-year to more than 7 million tons between January and June, according to the Turkish Cement Manufacturers' Association.
Meanwhile, Spanish cement consumption is predicted to decline by 20 percent, after this year’s first half witnessed a 16.5 percent decline at 6 million tons, according to the Spanish Cement Association, Oficemen, which stated that lockdowns and construction suspensions heavily affected cement businesses.
Saudi Arabia’s cement market continues to grow in August
In August, cement sales in Saudi Arabia climbed by 39 percent to over 4 million tons when compared to the same period las year. Domestic sales jumped 41 percent year-on-year, while exports declined 19 percent.
Saudi White Cement registered an increase of 24 percent year-on-year in its sales in the first eight months of the year. According to Shuail bin Jarallah Al-Ayed, the company’s CEO, sales are growing boosted by higher demand and the company expects the trend to continue in the remainder of the year.
Pakistan’s cement sales also rose, by 5 percent, year-on-year in August. Month-on-month, however, dispatches were less than almost 5 million tons recorded in July. Exports also improved, growing by almost 6 percent.
Shipping market outlook
Reduced demand showed its effects on shipping at global level, with the Baltic Dry Index declining 313 points to 1,282 points on September 14, from the level of August 14. The Panamax market faced challenges in the first two weeks of September, while Supramax and Ultramax market registered lower demand, with losses of 32 points weak results.
In terms of vessel trade, Ultranav, a shipping company controlled by the von Appen family, sold in early September its last Panamax bulker, the 2006-built Elena II, for USD 8 million.
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.