The Syrian government last month issued an unusual tender to export thousands of tons of Portland cement, the price of which has increased sharply in recent months.
On December 22, the state-owned General Foreign Trade Organisation (GFTO) asked traders to bid on 20,000 tons of cement produced by government cement plants under the management of the General Organisation for Cement and Building Materials. The bid bond is EUR 25,000 and the last day to receive offers from traders is January 25.
The tender seems to suggest that there is an oversupply in the local market, although the price of cement in the local market has been rising lately.
In December, the government boosted the price of one ton of cement to SYP 125,000 for the most common grade, No. 32.5, up from SYP 70,000. Other grades also saw significant increases. (See Table 01 below).
The government also set the price for Portland cement manufactured by Al-Badia Cement, the only private sector cement plant still operating in Syria, at SYP 135,000 for each packed ton of cement grade No. 32.5 (See Table 02 below). This is still only around half its price of SYP 250,000 per ton in the black market.
The government sets not only the price of cement sold by its companies but also by the private sector. It was not immediately clear why it set a different price for Al-Badia.
Prices of key building materials, such as cement and iron, increased significantly last year. A ton of iron is now worth SYP 1.5 million to SYP 2 million in the black market, while its official price was set at SYP 1 million last June.
The rise in cement prices would suggest a shortage of supplies, but the decision to export suggests otherwise—unless it reflects a decision by the government to prioritise foreign currency revenues.
In December 2020, theAl-Thawra newspaper reported that in the first eleven months of last year, the three state-owned plants of Adra, Hama and Tartous sold around 1.9 million tons of cement, compared with 1.7 million tons for the same period in 2019.
Based on the monthly average, this would put last year’s total sales at 2.1 million tons, compared with 1.8 million in 2019.
Sales of cement are usually a good proxy for construction activity. However, the fact that data is not yet available on the volume of last year’s imports and on Al-Badia’s sales makes it difficult to understand whether the increased production from state-owned plants reflects a rise in construction activity or lower supplies from these two other sources.
Official Prices of Cement in Syria as of December 31, 2020
|Prices of Cement Maunfactured by the State||Packed Bag (SYP)||Bulk Bag|
|Portland Cement Grade 32.5||125,500||106,350|
|Portland Cement Grade 42.5||151,600||130,850|
|Pozzolanic cements Grade 32.5||114,300||94,650|
|Sulfur Resistant Cement||161,500||140,150|
|Prices of Cement Maunfactured by Al-Badia Company|
|Portland Cement Grade 32.5||135,000||124,000|
|Portland Cement Grade 42.5||163,500||152,500|
|Pozzolanic cements Grade 32.5||n/a||n/a|
|Sulfur Resistant Cement||n/a||n/a|
Source: the Ministry of Domestic Trade and Consumer Protection