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Cement Exports Not So Profitable After All

Cement Exports Not So Profitable After AllCement Exports Not So Profitable After All

What has enabled cement to lead the charts among Iran’s main exports and remain competitive in foreign markets is the government subsidization of energy for the sector.

According to deputy chairman of Iran-China Chamber of Commerce, Majid Reza Hariri, energy expenses account for one-third of cement’s final cost, and “if we ever provide the cement industry’s required energy at international prices, our cement will basically have no demand overseas.”

Eghtesad News quoted Hariri as saying that experts believe what Iran is exporting is in essence its energy subsidies, not a profitable commodity.

Demand in Iraq, which has until now been the main export destination for Iranian cement has recently been waning due to the neighboring country’s unstable condition, which has resulted in a drop in production and substantial amount of overproduced cement piling up in depots.

According to head of cement employers association Abdolreza Sheikhan, cement exports and production during the first five months of the current Iranian year (started March 21) dropped 18% and 10% in terms of volume compared to the same period of last year respectively. He added that about 8 million tons of excess cement are currently stored in depots.

The official emphasized the need to find new overseas markets to export surplus cement and spur production.

Turkmenistan, Afghanistan, Azerbaijan and Kuwait are currently among other export destinations of Iranian cement.

Iran ranks first in the world in cement exports and fourth in cement production.

Financialtribune.com