Banco Santander: positive outlook for Mexican cement companies

Banco Santander: positive outlook for Mexican cement companies
07 September 2016

Banco Santander analysts have upgraded their forecast on share prices of two key Mexican cement producers. The bank expects the company’s share price to rise 8.5 per cent in the next 12 months to MXN17.10/share. For Elementia, the share price would advance by 24.5 per cent in 2017 to MXN28/share.

The bank said the share price increases were supported by a rise in cement prices by the companies. Cemex is expected to raise its prices by 18 per cent while Elementia would see a 25 per cent advance.

Mexico’s effective production capacity is 50Mta in 2016 but is expected to grow by 5.6 per cent to 52.5Mt. In 2017 this latter figure is forecast to grow 3.8 per cent to 54.4Mt.

Demand is forecast to reach 40.5Mt this year with annual growth during the 2017-18 period at 3.8 per cent to 42.3Mt, according to Banco Santander, which attributes the growth to expansion of housing, industrial and commercial building. The new airport in Mexico City is expected to require 0.5Mta over the next four years.

Published under Cement News