Saudi Arabia: A lifting of the Saudi Arabian export ban on cement is unlikely to help local cement producers much according to a research report issued by Arqaam Capital. The investment bank has predicted that export volumes are likely to be restricted to 20% of output and possibly subjected to an export tax. This tax, equivalent to fuel subsidies Saudi producers benefit from, and transport costs would reduce the price advantage Saudi producers hold over international competitors.

"The domestic supply situation remains difficult. Sector clinker stocks have not budged since July 2014, remaining at nearly 21Mt as of March 2016 equivalent to four months of output. This, combined with existing capacity of 70Mt, and incoming capacity of 7Mt due in the 2016, equates to total potential capacity of around 100Mt. This suggests a substantial near/medium term surplus of 60%, given stalled domestic contracts and the fact that few export markets are currently viable," said Mohammed Kamal, Executive Director, Equity Research at Arqaam Capital.

Arqaam Capital view Yemen, Egypt, Qatar, Jordan, UAE, Bahrain, East Africa and Iraq as potential export destinations. However, on a Freight On Board (FOB) price basis and by taking export taxes into account, only Yemen, Iraq, and Jordan are seen as viable export destinations. This then narrows the list of potential Saudi cement exporters to Southern Cement, Najran, Tabuk, Al Jouf and Northern Cement.