China cement sector fundamentals not too bad - UBS

China cement sector fundamentals not too bad - UBS
Published: 14 October 2011

UBS says cement prices increased in most of the major cities south of the Jiangsu province, including Wuxi, Suzhou, Changzhou etc. It has two positive readings from the price increase: the demand is actually not too weak and has seasonally strengthened; the market coordination still works. "In the East of China, the market coordination and supply disciplines are most vulnerable in south of Jiangsu, and this round of price increase seems to be partly thanks to the kilns shutting down in the area," UBS says. Overall, "fundamentals appear better than the street’s bearish view... valuation looks too cheap and potentially the sector could have some rebound."