Thanks to the growing demand from the mainland China market, Taiwan’s domestic cement industry is expected to see substantial growth in exports and a slight increase in domestic sales this year.
Some of the island’s biggest cement makers, including Taiwan Cement Corp., Asia Cement Corp and Chia Hsin Cement Corp, said the size of their growth would hinge on the amount of orders placed by customers in mainland China. These cement firms will bring new manufacturing capacities online in the first half of this year.
According to a survey conducted by SinoPac Securities Co., the overall sales of Taiwan’s cement industry amounted to 20.1Mt last year, up five per cent YoY. Of this amount, exports came to 13.07Mt, down 1.7 per cent, and domestic sales jumped 22.5 per cent to reach 7.03Mt.
The securities firm predicted Taiwan’s demand for cement will grow to 15Mt in the first half of this year because hi-tech firms in the central Taiwan Science-based Industrial Park will break ground for new plants, construction will begin on the rapid transit system connecting Taipei and the CKS International Airport, and housing starts are expected to continue to grow.
Taiwan’s domestic cement price has been hovering around NT$2,200 (US$68.75) per metric ton since the beginning of the second half of 2004. Taiwan Cement noted demand for cement in the U.S., the Middle East, and West Africa has been substantially growing. For instance, the U.S. is expected to import 30Mt of cement this year, compared to last year’s 25Mt. With the anticipated increase in cement exports, Taiwan Cement estimated it would see export profits grow by NT$600m (US$18.75m) this year over last year’s level.
Despite the impact of its macro-economic policy of dampening rapid growth, mainland China still produced 1bn metric tons of cement last year, an all-time record. With construction beginning on several high-speed railways in southern China, the quoted price for cement in that market jumped RMB20 (US$2.46) per metric ton in February from the price quoted at the end of last year. The cement price is expected to reach between RMB330 (US$10.31) and RMB350 (US$10.93) per metric ton in southern China in the second quarter of this year.