Cement markets on edge as Middle East tensions threaten costs

Cement and clinker markets saw a nervous start to the week with escalating conflict in the Middle East, with sources saying they were in wait-and-see mode for any potential impact on trade flows and prices.

Turkish producers said they had not seen any "positive or negative" impact but were following the situation closely.

"But chances are high that oil and coal costs will go up, affecting transportation costs and triggering high inflation. So as of today, we are worried about our contract prices in case of a significant cost increase. That may affect the market size," a Turkish producer said.

A Mediterranean-based trader said they had already received higher clinker offers from Asia. "For Med, not sure what the reaction will be," the source said. "[I] don't want to even call Turkish producers."

Egyptian sources said their exports to Israel were proceeding normally but cautioned that the situation remained tense.

In the Middle East, a Saudi Arabian producer said their loading operations were still running "smoothly," while a Qatari producer said trade had halted due to port restrictions.

In the Asian region, cement and clinker markets have not seen a direct impact from the conflict in the Middle East, with FOB prices across the region largely stable week on week, according to several traders and producers. Suppliers from Vietnam and Indonesia noted that loading operations and regional trade flows remain uninterrupted.

However, market participants said they would be closely monitoring developments, as higher crude oil prices and geopolitical risk could lift fuel, freight, and insurance costs if tensions persist.

"I have not seen any immediate impact so far, but we will need to keep a close watch on the freight market, which is very likely to move higher," a Vietnam-based trader said.

Another trader source said, "The region is very quiet as everyone is assessing the situation. We can't make any CFR offers as the freight prices have moved up. We should have a clearer picture by mid-week."