KUALA LUMPUR: The robust construction projects will continue to spur growth in the basic materials sector, according to RHB Research. 

The firm remains optimistic on the cement industry's prospects given the inherent synergy within the construction and property sectors. 

"With the slew of anticipated infrastructure projects in the country, building materials companies, especially cement producers, are well-positioned to capitalise on the spillover benefits," it said.

RHB Research said the bulk cement prices have stabilised and continue to sustain at RM380 per tonne as of July, and the firm foresees it remaining stable.

"This is given the expected demand from the Pan Borneo Highway, Sabah Sarawak Link Road, Kuala Lumpur-Singapore High-Speed Rail, Johor-Singapore Rapid Transit System, and Mass Rapid Transit 3," it said.

On the aluminium sector, RHB Research said global aluminium prices have recovered from a temporary blip in July, likely due to the anticipated rate cuts by the US Federal Reserve by September. 

The firm said the aluminium average selling price (ASP) is expected to be supported by slow capacity expansion in Indonesia, mid- to long-term demand from green sectors, and an increase in US tariffs on Chinese aluminium imports to 25 per cent from 7 per cent. 

"However, while we expect growth in major drivers, such as solar capacity expansion, to continue, the pace may moderate slightly in the second half (2H) of the year compared to 1H. 

"Overall, we upgrade the sector based on our 'Buy' call for Press Metal Aluminium Holdings Bhd, which holds significant weighting of the sector. 

"Cahya Mata Sarawak Bhd (CMS) is our sector top pick now due to its direct exposure to the revival of construction activities in Sarawak, given its prominent role as the leading cement provider in the state," it added.

https://www.nst.com.my/business/corporate/2024/09/1103277/rise-construction-jobs-spur-growth-basic-materials-sector