Thanks to the reconstruction demand of Japan in the wake of devastating earthquake and the implementation of domestic infrastructure and public work, Taiwan`s cement industry is expected to see demand grow 7% up to 10% year-on-year in the first half of this year.
Particularly, the massive business opportunities released from Japan tremble will boost cement prices internationally, which will push up domestic cement price by at least 10% in the first half of this year.
Taiwan`s top-tier cement producers, including Taiwan Cement Corp. and Asia Cement Corp., will see a 15% year-on-year growth in both sales and earnings in the first half of this year because they have established production capacities in Taiwan and China. Each of them is expected to boost annual production capacity by five million up to six million tons of cement in China.
Such second-tier cement producers as Lucky Cement Corp., Hsin Ta Cement Corp. and Universal Cement Corp., will also begin turning profitable in the first half of this year because of the price hike in cement prices.
As China`s 12th five-year economic development plan calls for enhancing energy-saving method by scraping low-efficiency cement plants, the selling prices for cement in southern, central and eastern China regions have been hiked by 25% year-on-year in the first quarter of this year.
Both Taiwan Cement and Asia Cement said they have made profits in the first two months of this year, albeit the reduction in working days because of the Chinese New Year holidays. Both companies asserted their production equipment utilization rate has picked up in the first quarter of this year.
As the spot market prices for cement in the entire Asian region have soared by 5-7% in the first quarter of this year, both Taiwan Cement and Asia Cement believed they would see continued surge in contract prices for cement in the second quarter or even the second half of this year.
In addition, Taiwan`s cement industry anticipated domestic demand for cement will grow 10% year-on-year this year because of the implementation of public works valued at over NT$500 billion.
Taiwan Cement and Asia Cement said they have seen a 10% growth in orders from public work. Hsin Ta, Lucky and Universal said they have hiked cement prices by NT$150 up to NT$200 per ton in the first two months of this year. Universal and Lucky saw sales in the first two months grow over 10% year-on-year.
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