Robust demand for cement and aluminium

PETALING JAYA: RHB Research expects steady earnings growth for Press Metal Aluminium Holdings Bhd and Malayan Cement Bhd underpinned by high aluminium prices and favourable cost structure.

Within the basic materials industry, the research house noted that Press Metal and Malayan Cement performed strongly in 2025, with 47% and 60% year-on-year (y-o-y) share price increases.

It noted that in 2025, London Metal Exchange (LME) average prices reached US$2,630 per tonne – up 8.6% y-o-y, in line with its US$2,620 per tonne forecast, while demand for cement remains steady, driven by the 13th Malaysia Plan (13MP) amid falling coal prices.

RHB Research said cement should see steady demand coming from 13MP with RM430bIl worth of gross development expenditure targeted for the 2026 to 2030 period versus RM415bil under the 12MP.

As such, it believed there woiuld be fairly consistent demand from specific projects including the central spine road, widening of PLUS highways and the Penang light rail transit.

It added that there is also a strong emphasis on flood mitigation projects, as the government aimed to complete 55 of such projects in 2030 from 17 in 2024.

RHB Research was “positive” on Press Metal for its vertical integration with the alumina capacity expansion.

“We also think the renewed focus on the solar segment allows it to better capitalise on the increasing global demand for renewable energy in the long term.”

The research house said its 2026 LME price of US$2,700 per tonne is under review.

Key risks include raw material cost inflation, a broader economic slowdown, and weaker average selling prices (ASPs). It said while ASPs remained stable in the first quarter of 2026, there were gradual price increases by competitors.

Malayan Cement will maintain ASPs for now, as it is comfortable with current profit levels, given the stabilising coal prices.

The company expected coal prices to stay at RM60 to RM70 per tonne of clinker versus RM70 a year ago, coupled with lower electricity costs.

“While we anticipate cement demand to continue being supported by core projects such as upgrades to the PLUS Expressway in Johor and Penang, and the upcoming completion of phase one of the East Coast Rail Link, we may see the upside for cement demand growth in 2026 not being as high as it was in 202.

“This is due to relatively high base in terms of the value of construction work done,” the research house said.

Meanwhile, the recent crackdown on overloaded lorries could raise competitors’ operating costs, giving Malayan Cement a scale-driven edge to take up more market share, it said.

Moving forward, it expected the group to continue recording sturdy margin growth from improved operational efficiencies and robust demand for the aggregates and concrete segments.