Credit Suisse: 2011 better for China materials

Credit Suisse: 2011 better for China materials
Published: 05 January 2011

Credit Suisse expects 2011 to be an "incrementally better year" than 2010 for China basic material sector, driven by the typical year 1 (of 5-year plan) demand acceleration, the delay in structural transformation, and continued positive consumption-driven demand. It adds, the negative side of the story is the high base in 2009-10 and a potential decline in property construction activities. The house says although China’s demand growth in the next five years may not support another "super cycle," the supply picture "has never been better," with the slowdown of new expansion, combined with the ongoing government effort to close down old capacity, is paving the way for a cyclical upturn in 2011-12. CS’ preferred sectors for 2011 are Chinese cement and thermal coal, with CR Cement, CNBM, and China Coal as top picks.