New Covid-19 wave and bad weather push March FOB cement prices down in the Mediterranean Basin

FOB prices for Portland cement decreased in March 2021 both in the Persian Gulf-Arabian Sea and in the Mediterranean Basin, down by almost 1 percent month-on-month, while East African CFR prices for bagged cement slightly increased, according to CW Research's Cement and Clinker Price Assessment for Med Basin and Persian Gulf-Arabian Sea & East Africa.

In the month, clinker export prices also declined by over 1 percent in the Persian Gulf-Arabian Sea, while falling by more than 0.5 percent in the Mediterranean Basin.

ÔÇ£Following months of increases, export prices in the Mediterranean Basin region weakened in the third month of 2021, due to the resurgence of the Covid-19 infections in key markets including Spain, Portugal and Italy, which led to a decrease in both consumption and exports during the first two months of 2021. Bad weather in Spain and Morocco also contributed to this downturn,ÔÇØ analyzes Wanderson Teixeira, Junior Business Analyst at CW Group.

Cement consumption declines in Spain in January

In Spain, cement demand decreased by more than 19 percent in January compared to the same month in 2020, down by about 200,000 tons, according to the Spanish Cement Association, Oficemen. In January, the decline was mainly due to the stoppage of construction works during the Filomena snowstorm.

Cement sales also recorded a yearly drop in Morocco in January, weakening by over 12 percent compared to year earlier, due to heavy rainfall in almost all regions, as well as the continuation of a state of health emergency.

On the other hand, cement production in Turkey increased more than 28 percent in 2020, compared to 2019, according to the Building Material Producers Association of Turkey Industry Report.

Cement exports from Saudi Arabia decrease in March while local demand rises

Saudi Arabia's cement sales increased 2 percent in March, pushed by local sales, which were up by less than 4 percent on a yearly basis. Meanwhile, exports were down by almost 34 percent compared to the same month of the previous year.

Meanwhile, in Kenya, cement consumption increased by 20 percent in 2020 to over 6 million tons, driven by both private and public sector construction activity in spite of the Covid-19 pandemic.

Shipping market outlook

In terms of shipping at a global level, the Baltic Dry Index reached 1,970 points on March 11, up 657 points versus the level of February 11, as rates for the Capesize and Supramax vessel segments rose to a 5-month high in the first 10 days of the month.

In March, the Greek owner Castor Maritime acquired a 2010-built Korean Kamsarmax bulker for USD 15.5 million, taking its fleet to 13 bulkers, with the delivery scheduled for the second quarter of this year. Star Bulk, another Greek dry bulk owner, announced it has acquired a Kamsarmax resale pair with the delivery scheduled to June and September 2021 from YAMIC, a joint venture between Mitsui and New Yangzijiang.

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.