FOB prices for cement and clinker showed mixed trends, continuing to increase in the Mediterranean Basin while declining in the Persian Gulf-Arabian Sea and East Africa in December, according to CW Research's Cement and Clinker Price Assessment for Med Basin and Persian Gulf-Arabian Sea & East Africa.
FOB prices for bulk ordinary cement in the Mediterranean Basin increased by almost 1 percent in the month, compared to November 2020. Meanwhile, in the Persian Gulf-Arabian Sea, FOB prices for bulk Portland cement declined around 1 percent, to an estimated USD 34 per ton. Additionally, prices in East Africa dip marginally by less than half a percent month-on-month.
“Despite an increase in cement sales in key markets in the Persian Gulf including Saudi Arabia and Iran, prices still remain weak, continuing on a downward trend since August 2020. On the other hand, prices in the Mediterranean Basin have been boosted by a recovery in demand, especially due to a robust performance of Turkish cement exports”, states Wanderson Teixeira, Junior Business Analyst at CW Group.
Cement sales in Saudi Arabia continue their upward trend
Cement sales in Saudi Arabia continued to see robust growth in November, increasing 15 percent year-on-year, according to Yamama Cement Company. Clinker production also increased by almost 6 percent. Cement exports, however, declined by almost 7 percent year-on-year.
In Iran, cement consumption increased 12 percent in the first eight months of 2020, compared to the same period of the previous year. Iran’s first shipment via Herat-Khaf railway to Afghanistan's Herat province, in the beginning of December, has opened another route to a key market for Iranian exports.
Cement consumption declined in Spain in October 2020
After a slight increase in September 2020, cement consumption in Spain declined more than 13 percent year-on-year in October 2020, according to data from the Manufacturers Association de Cementos de España (Oficemen). In Portugal, cement consumption saw a robust growth in the first nine months of 2020 by more than 10.4 percent year-on-year, according to the Association of Manufacturers of Construction and Public Works (AICCOPN).
Meanwhile, Egyptian domestic and export volumes of cement continued to decrease year-on-year in the third quarter of 2020, but recorded an increase of almost 4 percent quarter-on-quarter. The value of Egyptian exports of cement from January to September 2020 also declined by 8 percent compared to the same period last year, according to a report of the Council Export of Building Materials.
Shipping market outlook
In terms of shipping at a global level, the Baltic Dry Index increased to 1,211 points, up 87 points from 1,124 points on November 12, reflecting sluggish tonnage demand.
The Capesize and the Ultramax/Supramax markets weakened in the beginning of December, as well as the Handysize market. The time charter average and the overall index continued to improve, mainly aided by the US Gulf and Pacific routes in the second week of November 2020.
In terms of vessel trade, Scorpio Bulkers announced the sale of the 2016-built Ultramax bulker SBI Tethys for USD 18.3 million, with delivery scheduled for the first quarter of 2021.
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.