GCC cement capacity rises 13% but concrete prices could still increase

Demand increases created by dual booms in Saudi Arabia and Qatar could result in increased concrete prices

The medium term dynamics of the regional cement and concrete market have come under debate, with reports stating capacity could rise significantly, while suppliers have predicted a supply shortfall and price hikes.

Gulf Investment House has claimed that cement capacity in the GCC will rise 13% on 2011 figures, with actual demand rising a mere 6.6%.

However materials operations manager, Nandlal Sangtani, from one of the GCC’s largest ready mix suppliers, Unibeton, said that demand increases created by dual booms in Saudi Arabia and Qatar could actually result in increased concrete prices.

“Definitely there will be a cement shortage in the market in 2013 and 2014 and we see that UAE cement suppliers will increase their production to cover this shortage,” Sangtani predicted.

“The increment in demand of cement will hike up the cement prices which will result in a direct increment in the concrete prices as well. However due to the vast number of projects in Saudi Arabia and Qatar, the demand of concrete will keep on climbing,” he commented.

The situation could worsen as Gulf Investment House has also predicted a construction boom in Kuwait.

For now, Gulf Investment House said that Saudi Arabia will lead production capacity increases, with output expected to reach 58MT.

In the UAE however, the report predicted an oversupply that even Oman could absorb, despite prices in the Sultanate being higher than those in the Emirates and projects such as Salalah, Duqm and Sohar airports; steel and bitumen plants; and a string of water and power projects across the country.

Some of the most significant non-GCC nations mentioned in the report included Iran, whose production capacity will hit 110MT by 2015 – driven from 66.4MT last year, on the back of forthcoming project announcements – and Turkey, which has a production capacity of 70MT.

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