Thanks to the implementation of electric power rationing, cement prices in Guangdong Province of mainland China will continue stay at a high level even after the Lunar New Year holidays which fall in the beginning of February, which will benefit domestic cement firms operating in southern China region, including Taiwan Cement Corp., Universal Cement Corp. and Goldsun Development & Construction Corp.
The cement price rose to a high of CNY410/t in the beginning of January and since that time the price has been hovering at the high level. The three above-mentioned cement producers unanimously said they would be able to see earnings growth in the second quarter of this year due to the price hike.
Huang Chien-chiang, vice president of Taiwan Cement, noted the electric power-rationing situation occurred in Guangdong province is expected to last until the end of January, which has disturbed many factories there and resulted in rushing procurement.
Taiwan Cement said its Yingde plant in Guangdong province has little inventories to meet market booming demand. But the Yingde plant is now conducting a test run on a third kiln. The company believed that the power-rationing problem will be alleviated after the third kiln is completed.
The prices for the top-grade 42.5-type cement quoted in Guangdong province has gone up all the way from 260RMB in the second half of last year to 410RMB/t in the beginning of this year.
The cement market in Fujian province, where locates Goldsun, currently quotes the cement price at 400RMB/t.