Saudi Arabia’s stockpile of cement surged by an additional 500,000 million tonnes to 22.5m tonnes valued at SAR5.28 billion.
Producers were forced to cut output by five to ten per cent to bridge the gap between supply and demand, Al-Eqtisadiah reports.
Production has increased by five per cent to a total of 60m tonnes while consumption stood at 57m tonnes, according to Jihad al-Rasheed, chairman of the national cement committee.
He added that producers are entitled to slash production according to whatever they see appropriate, noting that authorities are still mulling lifting the ban on cement exports.
He also said that cement is priced by the government at SAR240 a tonne or SAR12 a bag.
Director-general of Yanbu Cement Company, Ahmad Zugail, said the surplus in cement production is unprecedented and urged authorities to open up new channels to sell the excess production.
He explained that producers have moved to cut production, but the supply according to the market’s needs will remain the same.
Another industry source, who spoke on condition of anonymity, said demand has retreated in the past period especially during the holy month of Ramadan.
The source said the stockpile is expected to drop by 10m tonnes to create some sort of balance between supply and demand.