Demand on cement has dropped by 5 percent as production surplus hit 22 million tons, which cover consumption of five months, an expert told Al-Eqtisadiah daily.

Jihad Al-Rashid, head of the National Committee of Cement Producers, said total production of the national companies reached 57 million tons.

The committee is working with the Ministry of Commerce to allow companies export cement and, therefore, handle with the surplus quantities properly.

He attributed the existence of big surpluses of cement to waiting of people to the decisions of the Ministry of Housing and subsequent decline in the construction pace.

However, decline in demand came at a time when factory owners have predicted that demand would climb up by 5 percent but, ironically, the demand fell by 5 percent thus keeping an imbalance of 10 percent from the normal situation and sending the price of one bag of cement from SR13 to SR12, he said.

Cement prices cannot be reduced more than this figure as prices are fixed by the Ministry of Commerce unless cement manufacturers desire to compete with one another.

As a temporary solution, some of the manufacturers may tend to extend maintenance periods of the factories in a bid to reduce production and minimize losses, he said.

Abdulrahman Al-Qarni, deputy president of Abawain Holding Company, said cement demand normally drops by the end of each year where the majority of construction companies have finalized their works and begun to explore orders for the new year.

The year 2014 was free from any (cement) crisis compared to previous years, he said expressing fears over allowing cement companies to export products which, he said, will have adverse effects on the local market.

He said reduction of prices would be more suitable; however, production cut by factories would not be a solution as demand on cement still exists.