Russian cement prices expected to grow 1.5 times

Russian cement prices expected to grow 1.5 times
Published: 13 May 2008

During 2007 output of cement production in Russian registered 60Mt. But despite the fast growth of cement production,  demand appears to  be growing faster supported by advanced levels of construction, thus leading to a market deficit.
According to the Federal Anti-Monopoly Service of the Russian Federation, at the height of the construction season, the cement deficit may reach 20% of the production volume.
According to the Builders’ Association of Russia, last year the prices for cement grew by over 100% in the country, and the resource’s share in the costs of construction per square meter grew to 12%. This year the prices for cement are expected to grow 1.5 times pushed by the growing prices for resources, electricity and logistics.
As a solution to the problem, the experts have suggested increasing the supplies of cement from abroad, and the customs duties for imported cement have been annulled for a preferential period, which is to last about nine months.
The Director-General of the said the cement manufacturers of Russia are working at 80-90% of their capacity. However the problem is that over 80% of cement in Russia is produced using the old, so-called "wet" method, which requires inefficient use of energy and is thus uncompetitive.
The deficit of cement may however be liquidated if the cement needs in Russia forecasted for 2010-2011 turnout to be as estimated 120Mt, and the production capacities reach 140Mt.