CMSB, Mcement: More Room To Grow (Cement industry, increase in ASP price + low coal cost)

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First of all, all people are well aware there is a significant Msia cement price ASP increase RM17(Sep'22) to RM22.50 (18th Nov'22) for each 50kg cement bag. Improvement on cement price boost by huge savings for cement manufacturer on lower coal price, from peak Sept'22 USD$457.80/ton to USD$132 /ton as of 15th Feb'23. 

Key positive push cement controlled-price increased due to:

A) Msia cement price ASP increase RM17(Sep'22) to RM22.50 (18th Nov'22) for each 50kg cement bag, +32% increased

B) Decrease feedstock thermal coal cost by 70% since Oct'22

C) Lower shipping costs now vs. Dec'22

D) Weakness input cost at USD denominated currency 4.75 (Oct'22) to 4.35 (Feb'23)

E) Increasing demand, low cement supply shortage, leads to further cement prices raised compared to other parts of Malaysia. Cement price in Sarawak is 15 per cent higher compared with Peninsular Malaysia and 4% higher than in Sabah. Cement demand in Sarawak has been robust and is forecast to surge with the construction of several major infrastructure projects, petrochemical plant projects and road construction.

[Info] The Sarawak coastal road construction and second trunk road and Sarawak-Sabah link road are all expected to raise cement demand. Sarawak-based cement producer, Cahya Mata Sarawak (CMS), a wholly-owned subsidiary of Cahaya Mata Cement Sdn Bhd, last raised its cement prices by an average of 10 per cent on 17 February 2022. Before the end of 2022, the company also apologise to its customers for a cement shortage, in part created by a maintenance shutdown at its Mambong grinding plant,

Key negative:

A)  Remove electricity subsides, tariff price on medium-voltage and high-voltage industrial users, increased of 30% electricity bills cost vs. before offset higher operation cost to production