UBS said that last week, cement prices in most regions of China remained flat and cement inventory levels fell in many regions due to better sales. The house says it is not expecting cement industry fundamentals to turnaround materially in the short term, but the macro-economic recovery and policy easing should remain the key positive drivers for the sector.

UBS reiterates its positive view on the sector, believing the cement industry has returned to an upward trend in 2Q12 and "the risk to cement stocks is more on the upside."