Cement, petchem producers brace for impact after Saudi Arabia hikes energy prices
29/12/2015 Argaam Exclusive
Petrochemical and cement producers will be affected the most by the kingdom’s decision to raise fuel and electricity prices, as production costs are expected to rise in line with higher input tariffs, a new study by Argaam showed on Tuesday.
On Monday, the kingdom hiked natural gas and methane prices by 67 percent to $1.25 per million British thermal units (MMBTU). Prices of ethane were increased by 133 percent to $1.75 MMBTU.
Similarly, energy-intensive industries including cement plants, iron, cable and pipeline manufacturers, as well as construction firms will be knocked down at various levels, in light of the nature of their operations and proximity to gas networks.
In the industrial investment sector, Saudi Arabian Mining Co. (Maaden) will be also hit by the subsidy cuts, given that the company relies mainly on power and natural gas to operate its phosphate and aluminum plants.
Meanwhile, higher diesel and other fuels costs will likely hurt the transport processes of bauxiteand phosphate from Maaden’s mines to the mineral industries complex at Ras Al Khair.