Saudi Arabia's cement sector contracted in February and private players' market share fell month-on-month for the first time since June 2009, NCB Capital said in a report. Nonetheless, the Kingdom's cement exports expanded 7.4 percent m-o-m, after three consecutive months of decline to 130,000 tons in February compared with 121,000 tons in January, it said. Additionally, on a year-on-year basis, cement exports grew by 103.1 percent from 64,000 tons. As of 21 March, the cement sector index was up 10.5 percent year-to-date versus a 9.8 percent increase on the Tadawul All Share Index (TASI). However, the month also saw a slowdown in y-o-y cement sales volume growth compared to January the same year. Clinker stock levels continued to fall, although as a percentage of monthly sales, there was a slight increase to 278 percent, the bank's Saudi Arabia Cement Sector monthly report. Cement and clinker sales volumes including exports for February stood at 3.62 million tons, reporting an increase of 22.9 percent y-o-y. However, volumes declined 5.2 percent m-o-m compared with 3.81 million tons in January. Production decreased 7.2 per cent m-o-m to 3.46 million tons, resulting in a fall in cement stock. Additionally, clinker production declined for the second consecutive month to 2.85 million tons, down 5.7 per cent on January. “While Najran Cement's market share is at an all time high of 6.5 percent, the other three private companies saw a decline in market share. Amongst listed companies, Yanbu reported the biggest increase in market share m-o-m, up 1.3 per cent to 9.5 percent,” it noted. Saudi Arabia has 12 cement companies with an estimated annual cement production capacity of 48 million tons. In February, total cement sales volumes in the kingdom stood at 3.41 million tons as against 3.63 million tonnes in January and 2.85 million tons in February last year. Only three companies exported cement during the month - Saudi Cement, Eastern Province Cement and Northern Region Cement. “In February, cement and clinker sales volumes in Saudi Arabia were up 19.4 per cent y-o-y to 3.43 million tons compared to 2.88 million ton in February last year. Yet, m-o-m sales volumes fell 5.7 percent compared to 3.64 million tons in January. While Yanbu Cement reported the highest increase in domestic cement sales on a m-o-m basis, it was the only company to report a decline in sales volumes on a y-o-y measure. The majority of companies reported a decline in sales on a m-o-m basis,” said the report. Clinker stock at the manufacturer level decreased four per cent m-o-m to 9.84 million tons for the second consecutive month, as a result of a decline in clinker production. On the other hand, on a y-o-y basis, clinker stock increased by 19.4 percent. Cement stock declined by 14.3 percent and 31.5 percent on a m-o-m and y-o-y basis respectively, as the majority of cement companies reported a decline in the stock maintained. Clinker stock as a percentage of sales increased to 278 percent compared to 273 percent in January. Qassim Cement continues to hold the lowest clinker stock at 55 pe cent as a percentage of February sales. On the other hand, among the listed companies, Southern Cement replaced Saudi Cement as holder of the highest clinker stock percentage at 500 per ent of February sales. In February, six companies lost domestic market share to six companies. Yanbu Cement was the biggest gainer of the month increasing its share by 1.3 percent. On the other hand, Arabian Cement, another player in the western region, was the biggest loser of the month with market share falling by two percent, the report further said. “The winners were Yanbu Cement (1.3 percent), Saudi Cement (1.2 percent), Najra Cement (28 percent), Qassim Cement (0.27 percent) and Southern Cement (0.2 percent), The losers were Arabian Cement (minus two percent), City Cement (-0.9 percent), Yamama Cement (minus 0.4 percent), Eastern Cement (minus 0.3 percent), Riyadh Cement (minus 0.2 percent) and Northern Cement (minus 0.03 percent, the first time since June 2009 by 0.6 percent to 19.9 percent.
