Saudi Arabia’s cement makers sold less in October and stockpiles kept growing, as a slowdown in building work reached the plants that supply it.
The Kingdom’s 17 producers sold 4.8 million tons, down nearly 9% from 5.2 million a year earlier, according to monthly data from Yamama Cement released last week.
At home and abroad
Local sales fell 7.4% to 4.7 million tons. Exports nearly halved to 96,000 tons.
The stockpile
Inventories of clinker, the half-made material ground into cement, rose 4.4% to 46.1 million tons.
At October’s pace of sales, that’s almost 10 months of supply sitting in the yards.
Winners and losers
Umm Al-Qura Cement grew local sales 27%, and Eastern Province Cement 25.5%.
Hail Cement fell 41% and Tabuk Cement 32%. The two biggest names, Saudi Cement and Yamama, each dropped about 17%.
Price is the real story
Saudi Cement’s third-quarter profit still rose 34% to 71.3 million Riyal ($19 million), the company said in a filing last week.
Revenue rose nearly 4% to about $101 million, on higher local volumes and selling prices, helped by lower selling and financing costs.
Qassim Cement went the other way. Its nine-month profit fell 17.5% to about $42 million, on lower volumes, lower prices and higher fuel costs.
The bigger picture
The slowdown matches what builders are reporting. Office, retail and industrial construction shrank in October for the first time since January, even as state infrastructure work hit a record.
Why it matters
Full yards and slowing orders could give buyers more room to negotiate. For contractors pricing new bids, cement may be one cost that stops rising, even as imported materials keep getting dearer.
What to watch
Whether producers cut prices to clear stock, and November’s sales figures early next month.
