[ET Net News Agency, 23 May 2018] HSBC Global Research said cement inventory levels
remain below 50% in Eastern and Southern China, much lower than the historical average for
this time of year, due to stricter environmental regulations and implementation of an
off-peak production halt.
Inventory levels in other regions are also lower than their historical averages. As the
traditional rainy season approaches, demand, especially in the South, has begun to weaken,
said the research house.
However, HSBC believes cement prices will fall less than normal seasonality due to the
low inventory and strict implementation of off-peak production halt. According to Digital
Cement, the average high grade cement price rose by 0.1% w-w to RMB431/t last week, a
historical high. There were price hikes in selective regions in Eastern China and mixed
price movement in Central China, while the rest of China remains broadly flat w-w.
It sees Anhui Conch Cement (00914) and China Resources Cement (01313) as the direct
beneficiaries of the strong cement prices in Eastern and Southern China. (KL)