The Armenian authorities want to prolong the cement imports duty by three months. The duty seized Iran cement imports, but contributed to an overall increase in clinker imports. The Economic Commission of the Parliament of Armenia approved the government draft amendments to the state duty law.
The duty on cement imports has been in force in Armenia since June of 2019, when local cement plants were forced to stop work due to cheap cement pouring into the market from neighboring Iran. The duty is to be extended from April 1 to July 1.
“We intend to monitor the process over the course of three months, and — depending on the market situation — either strengthen, or weaken the local market protection mechanisms,” said Deputy Minister of Economy Avag Avanesyan.
Since gas is way cheaper in Iran, the cement production process is also much cheaper. This allows Iran to successfully export cement to neighboring countries — Iraq, Afghanistan, Kazakhstan, etc — in large volumes.
The Armenian government established a duty of 22,000 drams (about $ 45) per ton of cement to negate the price disadvantage of the local cement product. Imports of cement decreased, but as a result, clinker exports from Iran showed growth. Until the spring of 2019, Armenia imported up to 3,000 tons of Iranian clinker per month, and now the number went as high as 8,000 tons.
Armenian cement plants are limited by operating only clinker grinding rather than its production capacities. The factories of Georgia, which import Iranian cement as well, faced the same problem. There is a similar problem even in Turkey, where serious protective measures against Iranian cement are being applied these days, as noted by Armenian Deputy Minister of Economy Avag Avanesyan.
Meanwhile, Kazakhstan intends to ban the import of any cement from non-EAEU countries.
In 2019, Armenian plants produced 590,500 tons of cement, 8.1% more than in 2018. However, part of the Armenian cement is made from imported clinker. The only integrated plants in the country are Hrazdan-cement and Araratcement. “Araratcement” proposed the government to increase the imports duty up to 30,000 drams.
Import of cement from Iran for the year reached 298,000 tons (in 2018 it was 170,000 tons). For comparison, Armenia imported only 11,900 tons of cement from other countries.
