Leading Taiwanese cement makers said yesterday that they would benefit from recent industry consolidation in the sector in China, which would likely boost cement prices.
“Because of industry consolidation in China, downstream clients in China are not demanding the price reductions they did a year ago,” Robert Chen (陳旭川), deputy spokesman of Taiwan Cement Corp (台泥), the nation’s largest cement producer, said by telephone.
Average cement prices in eastern and southwestern China have risen recently, while prices have stopped declining in the south, Chen said.
In addition, cement demand in China’s rural areas has increased after the Lunar New Year holiday, Chen said.
Asia Cement Corp (亞泥), the nation’s No. 2 cement producer, said the problem of oversupply is easing after the Chinese government asked companies to close down inefficient furnaces.
“The cement market in China was severely hit when the Chinese government decided to curb rising house prices,” said an official at Asia Cement who requested anonymity.
However, the official said cement prices in China were recovering only to their previous levels in 2011, when the Chinese government decided to open up the cement market and increase the number of suppliers.
However, if large Chinese companies decide to cut prices to secure market share, their Taiwanese counterparts would have to follow suit, the official said.
“If Anhui Conch Cement (安徽海螺水泥) [the largest cement company in China] decides to cut prices, we have no choice but to follow their decision,” the official said.
Taiwan Cement shares rose 0.13 percent yesterday to close at NT$38.45, while those of Asia Cement declined 0.54 percent to NT$36.5.