Saudi demand helps strengthen FOB cement prices in the Persian Gulf-Arabian Sea region in February

In February 2021, Persian Gulf-Arabian Sea FOB prices for Portland cement increased over 1 percent month-on-month, while clinker export prices rose almost 2 percent, according to the CW Research's Cement and Clinker Price Assessment for Med Basin and Persian Gulf-Arabian Sea & East Africa.

In the same month, East African CFR prices for bagged cement also increased slightly compared to January.

In the Mediterranean Basin region, cement and clinker prices continued on their upward trends, both increasing by about 1 percent in February month-o-month, backed by robust export figures from Algeria and Turkey. In 2020, Turkey exported 30 million tons of cement in 2020, while Algeria's GICA exported more than one million tons last year.

ÔÇ£Cement prices have been declining over the past months in the Persian Gulf, but February brought a slight price rise on the back of strong Saudi domestic demand and production restrictions in Iran due to gas shortage in January. However, overcapacity in the region may constrain further increases. Meanwhile, in the Med Basin, cement prices continued to strengthen as volumes grew in Egypt and Spain,ÔÇØ observes Wanderson Teixeira, Junior Business Analyst at CW Group.

Saudi Arabia's cement sales continue to witness a solid upward trend

Cement sales in Saudi Arabia rose by almost 6 percent in January, driven by a robust increase of over 8 percent in domestic sales, while exports declined 44 percent year-on-year.

In Iran, cement production declined severely in January, as several cement plants were shut down during the month, due to a gas shortage amid a cold winter and problems with the purchase of diesel fuel, which has increased the production cost. With that, cement prices reached a record in Iran, jumping by 1 USD per bag.

Cement exports from Egypt increase in 2020

Egypt's cement exports increased 13 percent year-on-year in 2020, according to the Export Council data. Kenya led cement imports from Egypt, followed by Libya, Sudan, the US, and Saudi Arabia. Within the country, cement sales in 2020 declined almost 6 percent year-on-year.

In Spain, cement and clinker exports declined in 2020 more than 3 percent when compared with 2019, according to data from Oficemen. The country's cement sales fell to their lowest level in more than 50 years in 2020, as the pandemic paralyzed almost all construction work for several months.

Shipping market outlook

In terms of shipping at a global level, the Baltic Dry Index fell to 1,313 points, down 543 points versus the level of January 13, as a slide in Capesize rates continued to outweigh gains in the smaller vessel segments.

In February, the Japanese shipping company Nisshin Kaiun has sealed a deal for the nine-year-old, scrubber fitted vessel Cologny, sold for around USD 23 million, while Castor Maritime acquired a 2009-built Japanese Kamsarmax bulker for USD 14.5 million.

Meanwhile, Scorpio Bulkers announced on February 4 that the company's shareholders approved the previously announced change of name to Eneti to be effective from February 8, which marks the company's transition to the marine-based renewable energy market.

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.