South Africans apparently not only pay among the highest prices for steel in the world, but also for cement. The market leader in this sector, cash cow PPC, says prices are justified given that transportation and packaging costs are higher in SA than in most other countries, according to a recently released Merrill Lynch report. It would be interesting to have a closer look at these costs in comparable countries.
The broker says cement prices in SA are at the top end of global prices. It says cement prices reflect the cement producer price index, which is higher than the general producer price index because of disproportionately high energy and transport components.
Furthermore, with demand for cement coming close to matching cement-making capacity in the country, and with most cement producers having launched massive expansion programmes, cement prices could be expected to edge even further upwards.