Hainan’s cement industry affected by power supply reduction in 2010
China Business News reported that the cement industry posted gross margin of 16% and net profit margin of 7.83% in the first 11 months of 2010. Gross margin in the first eight months was 14.9%.
According to the report, the increase in the gross margin was mainly due to greater cement demand during the August to November period and reduced output. Anhui, Hainan, Guangxi and Zhejiang provinces were affected by a reduction in power supply which resulted in lower production volumes in these places.
Mr Ma Jing an analyst from Bohai Securities, the growth in infrastructure and real estate investments guarantees stable profits for the cement industry.
The price of cement was CNY 420 per ton in the first three weeks of December up by 5.92%MoM. Prices in the eastern and southwestern areas increased the most during this period. The price of cement in eastern China rose 22%MoM.
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