Saudi- Cement demand drops 52
(MENAFN- Arab News) Demand on cement has dropped by 5 percent as production surplus hit 22 million tons which cover consumption of five months an expert told Al-Eqtisadiah daily.
Jihad Al-Rashid head of the National Committee of Cement Producers said total production of the national companies reached 57 million tons.
The committee is working with the Ministry of Commerce to allow companies export cement and therefore handle with the surplus quantities properly.
He attributed the existence of big surpluses of cement to waiting of people to the decisions of the Ministry of Housing and subsequent decline in the construction pace.
However decline in demand came at a time when factory owners have predicted that demand would climb up by 5 percent but ironically the demand fell by 5 percent thus keeping an imbalance of 10 percent from the normal situation and sending the price of one bag of cement from SR13 to SR12 he said.
Cement prices cannot be reduced more than this figure as prices are fixed by the Ministry of Commerce unless cement manufacturers desire to compete with one another.
As a temporary solution some of the manufacturers may tend to extend maintenance periods of the factories in a bid to reduce production and minimize losses he said.
Abdulrahman Al-Qarni deputy president of Abawain Holding Company said cement demand normally drops by the end of each year where the majority of construction companies have finalized their works and begun to explore orders for the new year.
The year 2014 was free from any (cement) crisis compared to previous years he said expressing fears over allowing cement companies to export products which he said will have adverse effects on the local market.
He said reduction of prices would be more suitable; however production cut by factories would not be a solution as demand on cement still exists.
Jihad Al-Rashid head of the National Committee of Cement Producers said total production of the national companies reached 57 million tons.
The committee is working with the Ministry of Commerce to allow companies export cement and therefore handle with the surplus quantities properly.
He attributed the existence of big surpluses of cement to waiting of people to the decisions of the Ministry of Housing and subsequent decline in the construction pace.
However decline in demand came at a time when factory owners have predicted that demand would climb up by 5 percent but ironically the demand fell by 5 percent thus keeping an imbalance of 10 percent from the normal situation and sending the price of one bag of cement from SR13 to SR12 he said.
Cement prices cannot be reduced more than this figure as prices are fixed by the Ministry of Commerce unless cement manufacturers desire to compete with one another.
As a temporary solution some of the manufacturers may tend to extend maintenance periods of the factories in a bid to reduce production and minimize losses he said.
Abdulrahman Al-Qarni deputy president of Abawain Holding Company said cement demand normally drops by the end of each year where the majority of construction companies have finalized their works and begun to explore orders for the new year.
The year 2014 was free from any (cement) crisis compared to previous years he said expressing fears over allowing cement companies to export products which he said will have adverse effects on the local market.
He said reduction of prices would be more suitable; however production cut by factories would not be a solution as demand on cement still exists.
Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept
any responsibility or liability for the accuracy, content, images,
videos, licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright
issues related to this article, kindly contact the provider above.
Comments
No comment