Taiwan Cement to raise export price by 50% in 2009

Taiwan Cement to raise export price by 50% in 2009
Published: 09 October 2008

Taiwan Cement Corp., Taiwan`s largest cement maker, has decided to raise export price of cement by 50%, to over US$50/t for next year from this year`s US$34-35, according to company sources.

Furthermore, including freightage, the adjusted export price of cement will even hit US$100-100/t in 2009, according to industry insiders.

Edward Huang, Taiwan Cement`s senior vice president, noted that demand for cement in the Middle East, West Africa, South America, East Europe and Southeast Asia has remained strong this year and the boom is even able to offset sales declines in Europe and the U.S., where the financial crisis has impacted demand.

Taiwan Cement has also suffered losses due mainly to coal price hikes this year, which have pushed up coal costs to nearly US$140 per metric ton in the first half of the year, from US$100 last year, severely undermining profit performance. Moreover, the international spot market price of coal has surged to between US$160 and US$170 recently, forcing the firm to raise its export prices for next year.

Despite the impending global recessions, Huang is optimistic about market prospects for 2009, adding that Taiwan Cement projects its cement export volume to stay at between 5Mt and 5.4Mt next year, close to the corresponding figure for this year.

According to Taiwan Cement, the firm set its cement export price at US$34-35/t, or US$70 with freightage included, early this year. Later the firm once raised the price to US$38-39, or nearly US$100 with freightage, this June. However, such price adjustment has not matched the pace of coal price rises in recent months.