Mediterranean cement producers cautiously optimistic about evolving geopolitics

Changing geopolitical dynamics globally, Trump policies, and their impact on cement trading, especially in the Mediterranean region, led to a cautiously optimistic industry sentiment during Intercem Shipping Forum in Lisbon, over Jan. 21-22.

"Ukraine and the Middle East could be a game changer. If reconstruction begins in the Middle East and Ukraine in the coming years, it could substantially alter trading flows in the Mediterranean rim," according to Yassine Touahri, managing partner at On Field Investment Research. "Once peace will return, Turkey and Egypt are well positioned to supply reconstruction of Ukraine and the Middle East, where conflicts have eliminated 15 million mt of cement demand."

Syria previously imported over 2 million mt of cement from Turkey and most Turkish producers are preparing their logistics to meet this demand.

"All producers in the region, be it Egyptian or Turkish, are cautiously optimistic about Syria and are getting ready for a boost in demand from there," one source told S&P Global Commodity Insights.

"We are already seeing an increase in inquiries from Syria," an Egyptian producer said.

Besides Syria, the situation in Israel also remains key. Turkey used to be the largest exporter of cement to Israel, accounting for nearly 4 million mt per year until the beginning of 2024 when the government banned cement exports to Israel.

"We couldn't make any forecast two months ago but now we can see some good news in a couple of months as we do expect some positive development towards the Israel ban," a Turkey cement producer said.

Gaza also would need to be rebuilt and could require more than 2 million mt of cement per year and in Ukraine, reconstruction could add 5-10 million mt of cement demand, according to On Field Investment Research.

"Some of this may be supplied by local plants restarting and neighbouring countries, but Turkey, which previously exported 4 million mt of cement to Ukraine at its peak, is well positioned to play an important role," Touahri said.

Platts, part of S&P Global Commodity Insights, assessed the first Platts CEMDEX Turkey price, reflecting Ordinary Portland Cement CEM I 42.5R (bulk), at $51/mt FOB Jan. 16.

Commodity Insights launched a pioneering suite of cement and cement clinker price assessments Jan. 9. The assessments incorporate market data to reflect the value of cement, clinker, and associated freight in the spot market, taking into account bids, offers, trades, and other indicators -- providing insights into pricing at key cement hubs.