A banner year ahead
Following several challenging years with cement demand declining, the year ahead promises a turnaround of fortunes for China. With domestic cement consumption and export demand expected to rise and new supply to moderate, the Chinese cement industry can look forward to a better year. Prices are also forecast to recover, providing improved returns for producers. By Addison Dai, DBS Vickers, Hong Kong.
China’s cement consumption is expected to grow in 2018, improving the demand-supply balance for domestic cement
producers such as Huaxin Cement (for our interview with the company’s CEO, Li Yeqing, see ICR April p26)
China’s economy expanded by 6.9 per cent in 2017 despite policymakers slowing credit growth. The tightened credit was felt with the Shanghai Interbank Offered Rate (SHIBOR) ending the year at 4.9 per cent compared to 3.3 per cent at the beginning of the year. In January 2018 new loans totalled CNY2.9trn (US$459.2bn), up 43 per cent compared with the CNY2.03trn reported in the year-ago period.
