In the first half of this year, Indonesian cement sales were poor. Starting from the third quarter, the state-owned cement giant Semen Indonesia is expected to gain huge benefits from the gradual recovery of cement demand driven by national infrastructure projects.
According to data released by the Indonesian Cement Association last Thursday, the total domestic demand for cement in the third quarter reached 14.47 million tons, up 1.3% from the previous quarter and 3% from the previous year. The increase was mainly due to the year-on-year increase in cement sales in August and September, which ended the continuous decline in cement consumption since February due to the economic slowdown and the decline in large-scale government infrastructure expenditure.
In the first nine months, Indonesia's cement demand fell by 0.9% year-on-year, which was significantly narrower than 2.9% decline in the first half of the year. From January to September, cement sales reached 42 million 580 thousand tons, compared with 42 million 990 thousand tons last year.
UOB (United Overseas Bank) Kay Hian said in a research report that if the average monthly sales in the fourth quarter can be maintained at more than 5 million tons, Indonesia's domestic cement demand will reach 60 million tons this year. This means that although the cement market continues to be depressed this year, it can still be maintained at the same level as last year. In addition, cement sales in September also showed that the current cement boom was mainly due to the promotion of government infrastructure projects and the improvement of the economy in the second half of the year.
Danareksa Sekuritas expressed the same view, saying that the promotion of domestic infrastructure projects is likely to drive the growth of cement demand. Although it is too early to draw a conclusion, this undoubtedly reflects the influence of the government's infrastructure projects. As a result, the demand for bulk cement will grow more significantly.
Danareksa further said that the improvement in domestic cement sales was due to the construction of several toll road projects, mainly the Trans-Sumatra Toll Road project. Work has already begun on several parts of the Sumatra Toll Road project, which spans 2,800 kilometers across the province and is expected to be completed in 2019. Considering that these projects are at an early stage and more infrastructure projects will be launched in the coming months, the demand for cement is expected to continue to rise.
Data from the Cement Association showed that demand outside Java increased significantly in September, especially in Nusa Tenggara (19%), Maluku and Papua (8%) and Sumatra (6%).
Although cement demand in Java fell by 2% in September and by 1.2% in the first nine months in many of the country's densely populated islands, several projects, including the Trans-Java Toll Road, public housing and irrigation projects, are in the pipeline, which is expected to help regional cement demand rebound.
Danareksa said in their research report that in view of the government's efforts to accelerate infrastructure spending, Java's cement demand will pick up due to the implementation of major projects.
浙公网安备33010802003254号