In this study, a simultaneous model describing the supply and demand system for Egyptian gray cement during time period 2006 until 2018 was estimated using the 2SLS-PC method, and it can be used in predicting the state of the Egyptian cement market. Gray cement represents an important strategic commodity and a major factor in the renaissance of countries for its use in infrastructure and construction works. The study aimed to identify the
factors affecting the gray cement market in Egypt.
The estimation of the majority of large simultaneous-equation models frequently suffers from a smaller sample than the number of predetermined variables so a meaningful first –stage regression isn't possible or when the number of observations is small or too small compared with the number of predetermined variables
Key words: Simultaneous equations model, two stage least squares (2SLS), principal components (PC), instrumental variables (IV), two stage least squares with principal components (2SLS-PC) and Theil's forecast accuracy coefficient (U).