Cement demand to rise on floods, China

Cement demand to rise on floods, China
Published: 29 June 2010

Demand for cement is expected to surge, as severe floods in southern China spur needs for reconstruction, said Taiwan-based cement manufacturers yesterday.

Both Taiwan Cement Co. and Asia Cement Corp. operate cement plants in southern and central China. Taiwan Cement’s are in Guangdong and Guangxi Provinces, while Asia Cement’s are in Jiangxi, Hubei and Sichuan Provinces.

They said production hasn’t hit a snag due to the deluge, yet logistics operations took a hit as shipping over rivers has become somewhat difficult.

Taiwan Cement said shipments remain at a 70-80 per cent level.

According Taiwan Cement, demand for cement will emerge in July when the main rain season commonly lasting from April to June passes. By then villages and rural areas will have to build houses, bridges, irrigation conduits and other infrastructure, efforts to be planned chiefly by the Chinese central government.

Asia Cement aired a similar opinion, saying that work at most construction sites in China has come to a halt due to the floods, and construction will begin after all the water has been pumped out.
Demand will increase by then, which will be a few months later, Asia Cement said.

Heavy rains have inundated various parts of southern China and caused levees and dams to break, resulting in water washing away and damaging properties and bridges.

Analysts pointed out items needed for reconstruction included: food, water, medicine, disinfectants, cement, steel, electric appliances and electric cables, among others. Investors should pick stocks associated with these products, they said.

Source: China post