Monday, October 22, 2012

CHINA: Conch Cement sees strong output, sales in Sept. on improved demand


China's biggest cement producer by output, Anhui Conch Cement Co., Ltd. (600585.SH), witnessed strong output and sales in September thanks to the coming of peak demand season, a China Securities Journal report said on Wednesday, citing several securities brokers.

The report said that several subsidiaries of the cement giant have been running at full capacity, and some of their output in September has hit new high. In addition, some subsidiaries have exceeded the target output and sales tasks for September and the third quarter of 
this year.

Its Hunan branch has realized this year's profit target ahead of time, according to the report.

The average cement price in China has registered week-on-week increase for several weeks; especially the cement prices in East and Central China regions have shown significant increases recently.

According to Essence Securities, Conch Cement's production capacity in East and Central China accounts for nearly 80 percent of its total capacity. If the cement price in these regions rises 35-50 yuan per metric ton (tonne), the cement giant's gross profit per tonne would go up to about 80 yuan from 50 yuan in Q3, the broker estimated.

If cement price continues rising, Conch Cement's performance may beat market expectation, said the Essence Securities.

According to predication of the Orient Securities, current cement price may continue in Q4 on basically balanced demand and supply in East China region, and the price is unlikely to show better-than-expected increases in November and December.

It predicted that demand is unlikely to see significant improvement in short term.

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