18 May 2016
Saudi Arabia: A lifting of the Saudi Arabian export ban on cement is unlikely to help local cement producers much according to a research report issued by Arqaam Capital. The investment bank has predicted that export volumes are likely to be restricted to 20% of output and possibly subjected to an export tax. This tax, equivalent to fuel subsidies Saudi producers benefit from, and transport costs would reduce the price advantage Saudi producers hold over international competitors.
"The domestic supply situation remains difficult. Sector clinker stocks have not budged since July 2014, remaining at nearly 21Mt as of March 2016 equivalent to four months of output. This, combined with existing capacity of 70Mt, and incoming capacity of 7Mt due in the 2016, equates to total potential capacity of around 100Mt. This suggests a substantial near/medium term surplus of 60%, given stalled domestic contracts and the fact that few export markets are currently viable," said Mohammed Kamal, Executive Director, Equity Research at Arqaam Capital.
Arqaam Capital view Yemen, Egypt, Qatar, Jordan, UAE, Bahrain, East Africa and Iraq as potential export destinations. However, on a Freight On Board (FOB) price basis and by taking export taxes into account, only Yemen, Iraq, and Jordan are seen as viable export destinations. This then narrows the list of potential Saudi cement exporters to Southern Cement, Najran, Tabuk, Al Jouf and Northern Cement.
Austria: A TEC are working on plans to increase kiln output with coarse and lower calorific fuel at the LafargeHolcim Mannersdorf cement plant. The intention is to increase the alternative fuels substitution rate to 100%. Other work being conducted includes lowering emissions and reducing pressure drop in the preheater tower. A higher separation efficiency of the top stage cyclones will also be achieved with increased production capacity.
A TEC will lead on the project as an engineering, procurement and construction (EPC) contractor. The execution of the project will be performed in collaboration with the Czech company Aliacem s.r.o. Přerov. Erection works will start in September 2016 and the whole project will be finished in March 2017.
US: Lafarge North America has scrapped plan to expand its Joppa cement plant in Illinois. One of the two kilns at the plant was shut in 2012. However, the company announced it was restarting this kiln and planning on building a third kiln in 2015, according to the Paducah Sun newspaper. The subsidiary of LafargeHolcim blamed the cancellation on poor market recovery for its products. Production is expected to continue at the cement plant using its existing two kilns. No job losses are anticipated.