01 November 2009
Cement prices in Abu Dhabi declined by almost seven per cent in October compared to the previous month, mainly as a result of falling demand.
Prices of Portland cement and sulphate-resistant cement dropped by almost Dh25 per tonne compared to the last week of September. A tonne of Al Etihad Portland Cement, which was selling for Dh330 on September 26, was priced at Dh305 on October 27. During most of the month, prices of the product fluctuated between Dh340 and Dh330.
Similarly, the cost of Al Etihad sulphate-resistant cement went down from Dh340 on September 26 to Dh315. The prices of Portland cement have been gradually reducing since the last week of September, going down to Dh320 during the first week of October, and further declining to Dh310 during the second and third weeks of October. The price further dropped by 1.61 per cent compared to the previous week.
Meanwhile, the price of white cement dropped 7.5 per cent by Dh45 per tonne compared to the previous week. The price had increased to Dh600 during the second and third weeks of October before dropping to Dh555 on October 27. However, when compared to the same period last month, the drop has been one per cent.
The price of gypsum from Oman, on the other hand, increased by about three per cent compared to the previous month, going up from Dh425 per tonne to Dh440. Costs of aggregates and sand have remained the same.
Industry officials in UAE said the possibility of prices dropping further is likely, as there has been no increase in demand, despite expectations that the end of Ramadan would witness a spurt in demand.
Officials last week told this newspaper that it would take another 12 to 18 months for the demand to increase to the 2007 levels.
Meanwhile, a senior official from Sharjah Cement said the electricity problem in the emirate has eased significantly, reducing the burden on industrial units.
Companies in Sharjah faced frequent electricity disruption during the past several weeks, which disrupted production levels.
"The situation eased significantly during the past week and we are facing less problems now," said Deepak Vaishnav, Marketing Manager of Sharjah Cement. "However, demand in the UAE continues to be weak."
With several major projects being delayed or put on hold and demand dropping by 30 to 40 per cent, companies are adopting various aggressive strategies to keep up with operational costs.
Additionally, Cemex last week announced its third-quarter results showing consolidated net sales decreased to $4.2 billion (Dh15.43bn) versus $5.8bn in the comparable period in 2008, representing a fall of 27 per cent. Third-quarter net sales in the MEA were $256m, down 13 per cent from the same quarter of 2008.
Cement prices in Abu Dhabi declined by almost seven per cent in October compared to the previous month, mainly as a result of falling demand.
Prices of Portland cement and sulphate-resistant cement dropped by almost Dh25 per tonne compared to the last week of September. A tonne of Al Etihad Portland Cement, which was selling for Dh330 on September 26, was priced at Dh305 on October 27. During most of the month, prices of the product fluctuated between Dh340 and Dh330.
Similarly, the cost of Al Etihad sulphate-resistant cement went down from Dh340 on September 26 to Dh315. The prices of Portland cement have been gradually reducing since the last week of September, going down to Dh320 during the first week of October, and further declining to Dh310 during the second and third weeks of October. The price further dropped by 1.61 per cent compared to the previous week.
Meanwhile, the price of white cement dropped 7.5 per cent by Dh45 per tonne compared to the previous week. The price had increased to Dh600 during the second and third weeks of October before dropping to Dh555 on October 27. However, when compared to the same period last month, the drop has been one per cent.
The price of gypsum from Oman, on the other hand, increased by about three per cent compared to the previous month, going up from Dh425 per tonne to Dh440. Costs of aggregates and sand have remained the same.
Industry officials in UAE said the possibility of prices dropping further is likely, as there has been no increase in demand, despite expectations that the end of Ramadan would witness a spurt in demand.
Officials last week told this newspaper that it would take another 12 to 18 months for the demand to increase to the 2007 levels.
Meanwhile, a senior official from Sharjah Cement said the electricity problem in the emirate has eased significantly, reducing the burden on industrial units.
Companies in Sharjah faced frequent electricity disruption during the past several weeks, which disrupted production levels.
"The situation eased significantly during the past week and we are facing less problems now," said Deepak Vaishnav, Marketing Manager of Sharjah Cement. "However, demand in the UAE continues to be weak."
With several major projects being delayed or put on hold and demand dropping by 30 to 40 per cent, companies are adopting various aggressive strategies to keep up with operational costs.
Additionally, Cemex last week announced its third-quarter results showing consolidated net sales decreased to $4.2 billion (Dh15.43bn) versus $5.8bn in the comparable period in 2008, representing a fall of 27 per cent. Third-quarter net sales in the MEA were $256m, down 13 per cent from the same quarter of 2008.
By Joseph George
© Emirates Business 24/7 2009
