Saudi Arabia’s local sales volumes dipped 10% Y-o-Y in December to 3.7mn tonnes, though improving 12% M-o-M, according to Yamama Cement’s monthly report. The Y-o-Y decline trend, however, was slowed down during the month (-10% vs. 12M trend of -13%); the M-o-M improvement was mainly due to seasonality factors.
 
FY18 registers 13% volume decline: Total local cement sales volume in Saudi Arabia during FY18 reached 40.8mn tonnes, which is a 13% drop vs. 2017 volume figures – the third consecutive year to see a decline.
 
Southern region remains strong, the Northern region in the bottom: The Southern region continued to post a resilient performance and recorded a 10% Y-o-Y growth during the month, mainly supported by strong volumes from Southern Cement Company (+25% Y-o-Y). On the other hand, the Northern region remained weak and volumes fell 29% Y-o-Y because of a weakness witnessed across the region’s companies, especially Northern Cement Company (-51% Y-o-Y) due to its partial shift to white cement. The Central region witnessed a 5% Y-o-Y slide in its volumes, while the Eastern and Western regions fell 18% Y-o-Y and 16% Y-o-Y, respectively.
 
Export volumes gaining momentum: Export volumes grew significantly M-o-M (1.9x), supported by a surge in clinker export volumes, which stood at 548k tonnes (+190%) during the month, but cement export volumes remained at 150k tonnes (-17% M-o-M). Yanbu’s clinker export volumes surged during the month (represents c42% of KSA clinker exports), whereas Saudi Cement Company continued to be the market leader in terms of cement exports, with 90k tonnes (accounting for 60% of total exports). Southern Province Cement started exporting for the first time: 25k tonnes of clinker and 7k tonnes of cement. FY18 recorded 1.1mn tonnes of cement and 3.15mn tonnes of clinker exports.
 
Clinker inventory increases slightly: Clinker inventory increased slightly during December (+1% M-o-M, +19% Y-o-Y) and reached 42.3mn tonnes. This represents c14 months of sector-level clinker requirement.
 
4Q18 sales volumes dip 15% Y-o-Y: On a quarterly basis, the sector’s 4Q18 aggregate sales volumes fell to 10.46mn tonnes (-13% Y-o-Y, +15% Q-o-Q). With regard to our coverage universe, combined sales volumes came in at 7.9mn tonnes (-14.7 Y-o-Y, +10.8% Q-o-Q), beating our volume estimates by 9%, mainly as a result of stronger-than-expected local volumes, especially in the Eastern and Northern. 

Yamama Cement monthly report, Sameer Kattiparambil, Dina Hicham