Traders doubt cheaper US cement sales

An announcement by a US-based cement company of supplying cement to the UAE market at 33 per cent less than the prevailing market price has drawn scepticism from traders in Dubai.

Reacting to yesterday's announcement by American company Cement Central, some traders in Dubai even called upon UAE authorities to introduce an anti-dumping mechanism against such cheap imports.

Cement Central said it would distribute cement in Dubai for just Dh220.39 per metric tonne, almost 33 per cent less when compared to the present market price.

In a statement, Cement Central said it has partnered with several distributors in the UAE to offer cement starting at as low as $60 per metric tonne, a major offset from the current price of $90 per metric tonne.

Magdi Shoukri Kestandi, Sales Manager, Bin Lahej Cement Products in Dubai, yesterday wondered how a company could sell so much below the existing market price. "It could be a direct result of the decline in the US economy. The housing sector is affected the most and they want to dump their products in the region," said Kestandi.

Rovan P D'Souza, Business Development Manager at the Transgulf Cement Products, told Emirates Business that, if true, the new offer could be a sign of things to come in future.

"I still cannot believe they can afford to distribute cement in the UAE for just Dh220 when currently cement is sold at around Dh380 toDh400 per tonne. The price they have quoted must be prior to the shipping charges. If you add an additional Dh100 per tonne as shipping charges and additional logistics charges after it reaches the UAE ports, the cost will rise to almost Dh350," said D'Souza.

The announcement comes even as cement prices in the UAE are set to fall following shrinking demand and production costs.

According to Cement Central, with countries such as Egypt and India suspending their cement exports, the increasing demand is outpacing supply in an area ranging from the UAE to Qatar and East Africa.

"In a region where $1.7 trillion worth of real estate is being constructed or planned, price trends in the cement industry take on heightened significance," said Cement Central.

Carlos Perez, Managing Director of Cement Central, said: "A number of mega projects in infrastructure, tourism and real estate are currently in various stages – from designing, tendering to construction – and the same trend is likely to continue in the coming years, which will create regular demand for cement in the country."

Being aware of the crisis facing contractors and builders in Dubai, Cement Central and its distributors felt the need to step in and offer competitive prices.

"Even though we distribute globally, our immediate focus is on emerging Middle Eastern and European markets," said Perez. "We currently have a 60 million-tonne allocation geared towards helping the ever growing expansion in Dubai."

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