Saudi Arabia cement sales fall 11% in 1Q18

16th APril 2018

Saudi Arabia’s total cement sales for 1Q18 stood at 11.8Mt, down 11 per cent YoY and one per cent QoQ. The combination of weak demand and high inventory levels forced the companies to seek other solutions such as entering other regions within the kingdom as well as exporting with low selling prices.

Yanbu Cement’s low cash cost per tonne gives the company the ability to export at lower prices, which is likely not possible for other companies to replicate, says finance research group Al Rajhi.

Cement demand in the kingdom is forecast to pick up following the first three months of 2018, but construction activity is expected to remain weak. The 2Q18 is predicted to see a slight drop in sales volume due to seasonality (Ramadan and the Eid), which will result in around 20 per cent drop on QoQ basis to reach 9.6Mt (-14 per cent YoY) based on Al Rajhi’s analysis.

For now, Al Rajhi remains neutral on the sector given the low demand, high inventories (35.7Mt) and price war in the sector, the company said in the report.

Source: CEMNET