Saudi’s cement price hike hits contractors

Cement prices in Western Provinces of Saudi Arabia have doubled in recent weeks.

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By  Colin Foreman Published  May 7, 2005

Cement prices in Saudi Arabia’s Western Provinces have more than doubled in a month. The pricing spike has been caused by maintenance work on several of the region’s kilns, as well as high levels of demand. Despite soaring demand for the product from the construction industry, producers have maintained prices at around SR10.5 to SR11 per bag. But contractors and traders in western cities such as Jeddah have been forced to pay prices of up to SR25 per bag. A spokesman for Damman-based Saudi Cement Company said that trucks from the west of the country were now transporting cement across the country from the Eastern Provinces to help bridge the gap between supply and demand. Traders have blamed transport costs for the price increases, but producers claim that transport costs should only account for SR1 or SR2 of a bag’s end price. Work on some sites has even ground to a halt because of the difficulty in securing deliveries. Speculation is also believed to be a factor as traders are buying up cement in bulk to force prices even higher, and then profit from the shortfall in supply by selling the cement on to contractors at a greatly inflated price.

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