Siam City Cement’s management has a positive view on the outlook for domestic cement demand this year and expects domestic cement consumption to expand by 10 per cent, compared with 12 per cent growth forecast for last year. Strong demand is expected to come from public infrastructure projects, mainly the mass-transit projects.
Despite rising domestic demand, cement prices have dropped five per cent during the past few months amid high competition from major cement producers to maintain their market shares. Cement prices are not expected to recover in the near term as the competition remains. In addition, the government plans to lift domestic prices of diesel oil in the next few months, which should be negative to cement producers, which will have to absorb the rising cost.
As one of the beneficiaries of upcoming infrastructure projects, Siam City Cement (SCCC)’s shares have outperformed the market during the past few months.