Goldman Sachs tips sustained China prices

Goldman Sachs tips sustained China prices
Published: 16 February 2011

Goldman Sachs (GS) keeps its view that China’s cement capacity growth is likely to peak in 2010, and cement supply will likely tighten from 2H11 despite slower FAI growth, suggesting "a sustained cement price rise." The house adds, water conservancy projects add further upside to demand as cement is the key construction material used. GS believes both Anhui Conch Cement and CNBM will benefit because Eastern China is one of the key regions for water conservancy projects; it adds, both are capable of supplying high-grade cement to be used in these projects, and both have an established distribution network in the rural market. GS also says that welfare housing is "a hedge for property tightening," benefiting Anhui Conch.