Boral’s Australian heavy building materials profits have started the year well and are expected to advance in 2007/08 on the back of better prices and volumes as well as increased operational efficiencies. A notable pricing example can be seen in Queensland, where an Aus$8 per tonne (US$7.20/tonne) price increase has recently been announced.
This follows a strengthening of import parity prices as both Chinese export prices and freight rates have increased. In spite of the continued weakness in the New South Wales housing market, Australian building products are showing a first quarter improvement.
In the United States, however, the housebuilding market continues to deteriorate and Boral now expects only 1.1m housing starts in the twelve months to the end of June, which represents a 30% reduction, and consequently lower shipments of bricks and roof tiles.