Goods

Cement prices fall due to increased supply as clinker shortage eases


Cement consumption increased 18% in the six months to June, driven by increased construction activity in the private sector. FILE PHOTO | NMG

Retail prices for cement have fallen over the past month after peaking at between 800 and 1,000 shillings per 50kg bag in March on improved supplies from mills whose clinker shortages erupted. is attenuated.

The cost of cement, alongside that of other building materials, rose significantly in the first quarter of this year, burdening developers with higher costs which saw some projects halted due to budget overruns.

The rising costs were partly due to global supply chain constraints due to pent-up demand catching up with the market after the Covid-19 pandemic and the Russian-Ukrainian war which increased the cost of coal, which is used to make clinker.

Traders who spoke to the business daily said the price of a bag of cement now sells for between 650 and 680 shillings, with some traders offering the product for as low as 630 shillings.

“Before the elections the prices were high but after the election period the price went down. People used to raise prices because of shortages,” said Ms. Grace Waweru, Equipment Operator in Kawangware, Nairobi County.

Cement production has outstripped consumption over the years, keeping prices in check. There has also been increased competition in the market due to the entry of new players, while the export market, which was absorbing excess production, is also shrinking as more and more countries in the region set up their own production plants.

Data from the Kenya National Bureau of Statistics (KNBS) shows that cement consumption increased by 18% in the six months to June, due to increased construction activity in the private sector which defied the surge cement prices in the first quarter of the year.

KNBS data shows that 4.97 million tonnes of cement were used during the period, compared to 4.06 million tonnes consumed during a similar period last year.

With the decline in cement prices, consumption is expected to increase in the last semester.

It is a relief for developers who had blocked some construction activities for the past two years due to restrictions linked to the Covid-19 pandemic, the war in Ukraine and high import prices for inputs.

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