Growing demand blamed for cement price hikes

Growing demand blamed for cement price hikes
Published: 03 October 2005

A senior Ministry of Industries and Mines official said that growing international demand and high oil prices are responsible for the recent hikes in cement price, rejecting reports that the Ministry has failed to regulate the market properly.

Abbas Safakish, the ministry’s director general for mineral affairs, told ILNA that cement prices have gone up on the international markets, adding that prices increased in Iran despite a meager 1.5 per cent rise in production.

He said Iran exported 1.8Mt of cement last year, stressing that the huge difference between domestic price of cement and that of international markets has encouraged producers to export.

"In Iran cement is marketed at US$40/t, whereas the product sells for US$90 abroad," he said.

Recent hikes in the international cement prices have discouraged the government from importing this product.

Experts say the shortage of cement would be overcome with the onset of winter and the completion of several cement factories in the coming months.

Some 20 major cement projects are currently being implemented across the country.

Official statistics suggest that Iran’s cement production will double in the next 15 years to reach 65Mta. At least two 3500t capacity cement units must be constructed each year to achieve this target.

Cement production currently stands at 32 mln tons per annum. Factories in Tehran account for 13 per cent of the total national production.
Iran produces some 70 per cent of the equipment used in the domestic cement industry.

Annual cement production capacity growth reached 7.1 per cent during the Third Plan (2000-2005). Production capacity growth will average 15.2 per cent by 2010.