Barclays lowers China's 2013 pricing forecasts

Barclays has reduced its forecasts for cement prices in China this year to +2 per cent from the previous +5 per cent, according to reports by Dow Jones. It has therefore cut its 2013 earnings per share estimates for cement companies by 1-20 per cent to reflect the lower price realisations, which will be partly offset by lower coal prices and higher sales volumes estimates.

Barclays says that its positive view on the improving supply/demand situation in 2013 is unchanged and the near-term positives, including seasonal strength in cement prices and sequential sales growth are the catalysts.

China's cement prices vary widely depending on the provinces. However, last year saw prices come under pressure, droppiing to an average of CY380 (US$61) by April and subsequently experiencing varying degrees of pricing recovery during the second half of the year. Further price improvements are expected due to tighter supply and increased demand.