September 28, 2009

Bitumen demand in Qatar

Stable supplies and prices seem to have brought cheer to Qatar’s construction industry, which for long faced shortage of cement, sand, bitumen, steel and other materials.

Relaxation in import procedures, production boost and slackening global demand because of the economic downturn have been cited as major reasons for the stable supply of construction materials in the local market.
Industry sources said adequate quantities of cement were now available with the country’s main producer Qatar National Cement Company (QNCC). The company levies a wholesale price of only QR14 a bag at its production facility in Umm Bab, which has seen production boost in the recent months. Qatar’s cement requirement is estimated between 18,000 and 19,000 tonnes a day.

QNCC’s production has scaled up to 4.65mn tonnes (15,500 tonnes a day) from 3mn tonnes in mid-2008 following the completion of the cement mills (Plant-4) at the company’s facility at Umm Bab.
The balance (about 3,000tons per day) is met through imports, mostly from India and Pakistan.

“Adequate cement is available at reasonable prices in the wholesale market,” said the project manager of a leading Doha-based construction firm.
The sale of cement by unauthorised retailers has already been banned in Qatar. Unauthorised retailers were charging up to QR50 a bag when there was severe shortage of cement in the country until a few months ago.
The relaxation in import procedures has come as a big relief to the construction sector. Authorised construction firms can now freely import cement, sources point out.

Cement shortage in the country was triggered by the construction boom and the first major shortage was seen in 2004. Besides the huge demand caused by the country’s rapid expansion, the lack of import facilities at the Qatari ports triggered the shortage and subsequent higher prices.
The availability of treated sand has also improved considerably though the price has not come down commensurately. The official price tag of washed sand is QR22 per tonne. But one ends up paying much more due to transportation expenses.
However, costs have now come down to about QR80/ton from QR120/ton a couple of years ago, obviously due to the fall in transportation costs.
Qatar Sand Plant is the only producer of treated sand in the state. Washed sand is widely used for concrete works in the country.
Steel prices have already stabilised in the market in line with the international trend.

A bitumen roll costs about QR100 but there is no shortage in the market now, a source said.

Bitumen, a tar-like substance and a by-product obtained during crude oil refining, is used for waterproofing in buildings, bridges and drainage.
It is also widely used for road construction and resurfacing. Qatar mostly meets its bitumen requirements through imports from Saudi Arabia.

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