August 30, 2008

Gulf cement companies seek more SA coal – Report

It is reported that cement makers in the Gulf state of Oman and the United Arab Emirates have joined cement makers in India and Pakistan in seeking increased quantities of South African coal to use as a fuel and raw material.

Some industry sources said that demand from the Gulf is unlikely to be huge but will be a price boosting factor. Demand from India is expected to be 9 to 10 million tonnes in 2008, while Pakistan will take 3.5 to 4 million tonnes but South African exports are expected to fall from 66 million tonnes in 2007 and could be as low as 60 million tonnes.

Traders said that Oman Cement Co last week was seeking up to 5 cargoes of South African coal and bought one from traders Glencore at around USD 155 a tonne delivered to plant or about USD 150 a tonne CIF. Ras al Khaimah Cement in the UAE bought a prompt South African cargo, also from Glencore, at the same price. Gulf Cement in the UAE also bought a prompt South African coal cargo at USD 157 a tonne delivered to plant from Dubai based Emirates Trading.

Traders said that Gulf market is still very much a niche market which many players find difficult to operate in. The cement plants want coal delivered to their plants, not just to the ports and not all suppliers want to get involved in the logistics of moving coal to the plants.