Local sales volumes grew 25% Y-o-Y in Nov (highest growth rate since Oct 2015), touching 4mn tonnes, according to Argaam, citing Yamama Cement’s monthly report. The growth momentum has been seen across regions, led by the Northern region (+70% Y-o-Y), followed by the Eastern region (+31% Y-o-Y), the Central (+28% Y-o-Y), Southern (+20%), and Western region (+10%). On a YTD basis, sales volumes inched up 1% Y-o-Y to 38mn tonnes.
Growth momentum strong for small players, partly on low base: Northern Region Cement Company (NRCC) dominated, in terms of growth rate (+70%), partly due to low base effect (NRCC’s local sales volume market share is 3.5%), followed by Umm al Qura Cement (+68% Y-o-Y), Najran Cement (52% Y-o-Y), Eastern Cement (+48%) and City Cement (+49%). However, Arabian Cement’s sales volume saw a decline of 16% Y-o-Y.
Export volumes were below YTD average: Although total exports activities grew 24% Y-o-Y, to touch 0.45mt, they came in below the YTD average sales volume of 0.63mt. We would assume the decline in export activities to have been partly due to improved activities in the local market. Saudi Cement dominated both cement and clinker export markets. Clinker exports make up 58% of total export volumes, and total exports (clinker & cement) make up 10% of the sector’s sales volumes.
Clinker inventory growth tapers to 2% Y-o-Y: Clinker inventory stands stable at 43mn tonnes (+2% Y-o-Y), implying c13 months of sector-level clinker requirement. More importantly, growth in inventory has tapered down significantly down to 2% Y-o-Y, the lowest growth level since 2013.
Sameer Kattiparambil, Dina Hicham