Financial services firm UBS has predicted that China’s cement prices will rise further, as it believes cement demand in China will increase.
According to UBS, cement prices have increased more than 60 per cent since August, much higher than its estimate, and with the improvement in market supply and demand and the further integration of the cement industry, the financial services firm expects cement prices to continue to rise in the next two years.
UBS particularly favors China National Building Material (CNBM) and Anhui Conch Cement.
The Chinese government has set a target for 10 million affordable housing units to be constructed next year, a 72.4 per cent increase over 2010’s target of 5.8 million units.
China’s affordable housing is expected to drive cement consumption in the property sector, which is likely to compensate for any investment slowdown in the private property market.