GCC Cement Sector 2012 3rd quarter data
- Average realization prices in GCC raised by 2.7% from the same period last year
- High cement demand in Saudi Arabia, UAE and Oman
Profits in GCC cement sector rebounded 24.4% in the third quarter of 2012 on a year over year basis, according to a recently released report by Global Investment House. Net profits increased to $1,325.1mn from $1,065.5mn measured in the same period last year. Net margins rose 285.8 basic points to 37.6% compared to 34.7% in the comparable period during 2011.
Average realization prices in GCC are steady
GCC cement prices average increase was $66.3 a ton in this third quarter in comparison of $64.6 a ton price in last year’s period. This rebound is caused by price rises in the two largest markets in the GCC – Saudi Arabia and UAE. In Saudi Arabia, cement prices rose 8.3% in the 3rd quarter from 2011 measurements in the same period. At the same time UAE faced a price increase of 6.7% to $52.3. More export avenues opened nearby and the demand situation continue to improve.
Saudi Arabia ahead of GCC cement market
Local supply in Saudi Arabia witnessed a 10.8% up during the 3rd quarter period in comparison with the same period a year ago. In addition, the cement production rose by 8.4% to 39.1mn tons. The activity stimulus was caused by strong fundamentals. The reasons for the prosperous cement sector in Saudi Arabia are three. First, the government is developing a massive funding campaign. Second, the demand for property is high, because of the increasing number of young population. Last but not least, the backing of the government through subsidies and cheap gas prices. The outlook shows that the Saudi market is most likely to grow further next year.