Starting June 29, Uzbek Commodity Exchange (UzEx) sets a limit of 114 tons on the amount of cement available for purchase per customer daily. The measures are explained by a spike in demand after almost a month of cement imports restrictions this year (May 1 - May 23).
The limit was introduced on behalf of the government of the republic and is designed to help drive away sub-purchasers. On June 26, almost 800 buyers took part in exchange trading, but only 275 (34 %) were able to actually purchase cement.
“The limit protects the interests of companies which are actually engaged in the construction activities or processing of cement. Big players now are mostly sub-purchasers. All they want is to get large volumes at any price to then resell at a premium price. Some players tried to regulate the market in this way. The limit will help to more or less relieve the tension,” say UzEx representatives.
A working group of government and business representatives has been created to ensure a balance of supply and demand in the cement market. The group recommends sellers to put up at least 40,000 tons of cement products on the daily auction.
Starting June 30, forward transactions have been available at UzEx with a supply-delay of over a month, providing protection against price fluctuations.
In H1 2020, 4.075 million tons of cement were put up on UzEx, of which 4.044 million tons were sold. The number of buyers from January to June increased 2.1 times.
The ban on the import of white and other Portland cement was introduced by a decree of the Government of Uzbekistan dated April 23. The Cabinet of Ministers explained the ban by a drop in demand for building materials and the need to support local producers. The resumption of work on large construction sites and the opening of building materials markets caused an increase in demand. At the same time, supply volumes fell by 25 %, while cement imports fell by three times. From April to June, cement prices rose by 64 %, up to 792,000 soums per ton (US$ 77.85).
A working group of government and business representatives expects new cement plants with a total design capacity of 1.278 million tpa to be commissioned this summer. This should increase the volume of cement sold at UzEx by 3,500 tpd.
A total of six new cement plants are now under construction in Uzbekistan with a total design capacity of 4.9 million tpa. The design capacity of existing enterprises is 15.1 million tpa. The largest by capacity are Qizilqumsement, Akhangaranсement, Almalyk MMC, Bekabadcement and Quvasaycement.
