Description

Iraq cement market outlook (discussion on production, demand, trade, production capacity, demand by end users, construction funding, government policies etc)

Iraq Cement Market 

The Iraqi construction sector is expected to play an increasingly important role in the development of its economy. Consequently, this will drive up cement demand. Consumption is estimated to rise substantially in the coming years. Around 3 million housing units are required over the next ten years to overcome the housing issues. It was expected that around 200k of these houses to be built in 2018. Out of which approximately 15% – 30% to be developed by the government while the rest by private investors.

In the war-torn country, housing financing and foreign funding remained pivotal to the reconstruction activities. Private banks are ready to provide financing, but their budget is restrained and would not be able to satisfy the enormous demand. Iraq needs donors’ money to continue its reconstruction activities, but such financing rarely comes unconditionally.

Furthermore, millions of displaced Iraqis also need to return their homes after the defeat of Daesh. So, renovation and rebuilding of damaged/destroyed houses will be a significant factor in the short to medium terms. The first phase of Mosul reconstruction project after its liberation from ISIS started in 2018 and will continue until 2020. The final stage is expected to begin by 2023 and will last around 2028.

Iraq’s cement industry is facing some tough time after rising oil prices for factories and lack of cash to cover fuel cost. The hike in fuel prices by the Ministry of Oil from 100 to 150 dinars/litres led to a significant increase in the cost of production in cement plants which operates a system of burning wet, which consumes about 200 litres per tonne.

Most of the private sector plants operating system of dry burning, and consume about 100 litres/tonne. The rise in costs would impact construction activities and will make imported cement attractive.

We expect that cement prices in Iraq will start slowing down in the long term due to the increase in supply. However, prices will remain elevated compared to other countries due to government protectionists’ measures. Most cement factories are state-owned, so maintaining import duties should benefit both private and public cement companies.

Iran will continue to play a key role in distorting Iraq cement market. The low production cost and the better exchange rate would benefit Iranian cement producers despite import tariffs. Moreover, with high corruption rates and weak security in Iraq, it would be hard to keep strict control of the borders. This will continue to impact cement producers in Iraq.

Key Areas covered

• What are the key developments in the Iraqi cement market?
• How will the demand and supply of cement market evolve in Iraq over the next ten years?
• What are the planned investments in the cement market?
• How will the building and reconstruction activities support the cement market?
• What are the future financing and funding opportunities in the country?
• Cement producer capacity by process
• List of key building and construction projects
• Historical and forecasts of cement demand and production
• Cement demand by residential, commercial and infrastructure
• Planned cement capacity
• Import and exports of cement in volumes
• Import and exports of cement in value

Scope

• Demand
• Production
• Import and exports
• Cement production capacity by plant
• International funding
• Drivers and restraints
• Trends and developments in the Iraq cement industry
• Macroeconomic and Demographic Indicators for Iraq