Bahrain Gravel Shortage Expected to Ease Next Month

TDT | Manama
Email : editor@newsofbahrain.com

The recent gravel shortage affecting Bahrain's construction industry is expected to end gradually next month, according to industry sources. They attributed the shortage, which began in October, to several Bahraini companies securing contracts for a major project in the UAE. This led to the temporary diversion of barges typically used for gravel transport to the UAE, creating a supply bottleneck in the Bahraini market.
These barges are expected to begin returning to Bahrain in January 2025, with a complete return anticipated by April, coinciding with the completion of the six-month UAE project.

The Daily Tribune quoted an industry expert early, Riyadh Al Barmi, as saying that the price of gravel has soared to over 110 Bahraini dinars per ton, resulting in lengthy waiting lists for the essential building material and the creation of a black market.

In the preceding months, gravel prices had fallen to unsustainable levels (BD 5.5 - BD 6 per ton), below the cost of production, due to a period of low demand and surplus supply. As per industry sources, companies were forced to operate at a loss to keep their vessels in operation. This, coupled with extended payment terms from construction companies (up to 12 months), created significant financial strain on gravel importers.

Industry sources pointed out that previous gravel prices were unrealistic and below production costs. "Currently, importing companies are demanding cash payments from concrete and construction firms to settle outstanding dues before delivering new gravel supplies. This has contributed to heightened discussions about a severe shortage in the market," a source explained to the Daily Tribune, adding that :"Clients often request payment terms ranging from 70 to 90 days, while suppliers in Ras Al Khaimah require payment within just 15 days. This situation, along with other costs such as diesel fuel, vessel maintenance, and crew salaries, has forced local suppliers to bear these upfront expenses, making the continuity of supply a significant challenge.

"The gravel prices were around 6 dinars a few months ago but have recently increased to approximately 7 dinars. Companies must now adopt new policies, providing gravel only to customers who pay immediately. Credit transactions are no longer feasible due to their negative impact on the market,” he said.

It's worth noting that Bahrain's annual demand for gravel is estimated at around 4.5 million tons. Concrete companies have increased ready-mixed concrete prices from approximately 28 dinars per cubic meter to 34 dinars, while the price for masonry blocks has risen from 22 to 26 dinars per hundred blocks over the past two months, in conjunction with changes in gravel prices.