Saudi Arabia to lift export ban?

Saudi Arabia to lift export ban?
Published: 27 March 2009

Saudi Arabia may soon lift its cement export restrictions in the face of increasing production capacity and falling domestic demand, according to an industry source cited by Construction Week.

The restrictions introduced last July banned cement exports to all countries with the exception of Bahrain, which had its weekly quota halved from 50,000t to 25,000t.

The affect was nonetheless crippling for Bahrain’s construction sector, which relies on Saudi cement for the vast majority of its supplies, causing many projects to suffer delays.

Andy Rogers, technical sales manager for Bahrain’s Haji Hassan Readymix, said supply was still tight and prices remained 20-30% higher, but he expected the situation to ease shortly.

“I understand that Saudi Arabia is going to release exports again very soon. That’s just anecdotally, but from a very good source,” he told Construction Week. “So if that is true then supply will be back up and we’ll see a reduction in price and we’ll pass that straight onto the customers.”

Saudi Arabia’s Ministry of Commerce imposed the export restrictions amid concerns of a domestic cement shortage during the Kingdom’s construction boom.

Rogers said this reasoning is no longer valid. “I think demand has dropped in Saudi a little bit and in addition to that the cement manufacturers in Saudi have invested heavily in increasing their capacity,” he said.

“They need an outlet now to get a return on their investment and so it doesn’t make sense anymore to keep the ban in place. I’m pretty sure we might see cement prices coming down soon.”

Source: Construction Week.