Fitch Ratings recently highlighted the contrasting market conditions for cement producers in China and India. In China, the demand for cement is anticipated to stay subdued in 2024 due to challenges in the property sector. This distress is expected to impact the overall demand for cement, creating a challenging market environment. However, there is a silver lining as Fitch suggests that despite weak demand, cement producers in China might experience stabilized profit margins.
On the other hand, Fitch foresees a more optimistic scenario for the cement industry in India. The agency expects a steady growth in cement demand over the medium term in the country. Nevertheless, this positive outlook comes with a caveat – the pace of capacity additions in India is projected to be faster. While this can fuel the growing demand, it may simultaneously limit the potential for significant improvement in profit margins for Indian cement producers.
Shifting focus to Korean securitisations, Fitch Ratings reassures that the arrears in this sector are deemed manageable in 2024. The agency offers a degree of confidence in the stability of Korean securitisations, providing a glimpse into the anticipated financial landscape for this particular market.
In summary, Fitch Ratings paints a picture of diverging fortunes for cement producers in China and India, influenced by distinct market fundamentals. The subdued Chinese market is juxtaposed against the more promising Indian market, but both present unique challenges and opportunities. Additionally, Fitch offers a reassuring perspective on the manageability of arrears in Korean securitisations for the year 2024.
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