Taiwan Slaps Anti-dumping Customs Duty on Cement Imports From Chinese Mainland

Beginning from May 30, the Ministry of Finance (MOF) of Taiwan has imposed interim anti-dumping customs tariff of 95.29% on cement imports from Chinese Mainland for four months, with the rate much higher than 50% expected by industry insiders. The move is seen to help alleviate price-competition situation among domestic cement manufacturers.

The imposition of the anti-dumping customs tariff is expected to benefit domestic makers of cement and related products such as premixed concrete, glass and ceramics, including Taiwan Cement Corp., Asia Cement Corp., Goldsun Construction & Development Corp., Taiwan Glass Corp. and Champion Building Materials Co.

At present, Taiwan Cement and Asia Cement quote domestic prices at between NT$2,000 and NT$2,100 per metric ton. Their gross profit margin was around 7.3% in the first quarter of this year.

As the anti-dumping customs duty is higher than expected, domestic cement firms will be able to upward adjust their product price by between 10% and 15% in the foreseeable future. It is anticipated domestic cement price will rise to more than NT$2,500 per metric ton in the second half of this year.

Institutional investors believed if domestic cement price rises by over 15%, Taiwan Cement and Asia Cement, Taiwan's two leading cement producers, will be able to raise gross profit margin by two to three percentage points in the second half of this year.

At present, the selling prices of premixed concrete reach between NT$1,700 and NT$1,800 per cubic meter. After domestic cement price is upward adjusted, the producers of premixed concrete will be able to raise product prices to between NT$1,900 and NT$1,950 per cubic meter.

Because of price competition, Goldsun currently saw gross profit margin slip to 5.2% in the first quarter of this year. Institutional investors predicted the company's third-quarter gross profit margin will rise to over 8% in the third quarter.