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Cement prices to go up? [24-07-2012]  
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ALTHOUGH there is talk in the market that cement prices in Malaysia will go up again next month, industry sources are unsure whether it will happen.

Building Materials Distributors Association of Malaysia president New Ching Liong said, to date, there are no indications to signal a rise in cement prices compared to a few weeks ago when one factory raised its prices.

"The situation has, however, stabilised with a lot of the mills running at full capacity, of which demand is there and the market environment is conducive for growth.

"If there is an increase in prices, this is probably the plants hoarding the cement to create shortage. This is to force the construction industry to pick up faster than the current pace," New told Business Times in a phone interview.


Meanwhile, the Cement and Concrete Association of Malaysia executive director Grace Okuda said it is hard to verify whether there is an actual shortage as its members have stopped providing the association with data due to the Competition Act 2010.

"Since the introduction of the Competition Act 2010, it is hard for members to talk about pricing. They don't provide us with the data anymore and we don't really know the actual situation on the ground. I can only gauge the situation.

Okuda said only the ministry (Domestic Trade, Cooperatives and Consumerism) can provide the data.

He said unlike steel which rusts, cement can be packed and stored for a limited period of time before it turns into stone.

New said, up or down, it doesn't make a difference to traders as they earn a fixed margin and usually pass the buck to its end-users which are the construction companies.

"As the middlemen, we buy expensive and sell expensive and earn trading commission," said New.

Malaysia consumes some 20 million tonnes of cement a year. The cement players in the country are YTL Cement, Tasek Corp, CIMA Group, Lafarge, CMS Group and Holcim.

A local Chinese daily yesterday reported that the price of a 50kg bag of cement might go up by six per cent beginning August 1.

Cement prices have gone up by 43 per cent over the past four years.

Source:BUSINESS TIMES
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