...Earnings to Benefit From Low Energy Costs, Limited Impact From Low Oil Prices Fitch expects near-term profitability in the sector to benefit from low energy prices. A much overlooked support for earnings has been cheap coal and coke, which comprise 60% to 75% of major building materials' fuel consumption. Prices for coal and coke have been falling over the past three years, but the impact has been masked by companies' efficiency improvement programmes. Thermal coal is now 30% cheaper than it was just a year ago. Coupled with our expectation of flat coking coal prices in 2015, we anticipate a relatively benign energy environment in 2015. In contrast, we expect limited direct relief from lower oil prices. Oil contributes less than 10% of the fuel mix for the largest cement producers, which in turn comprises around one-third of cement production costs. Oil therefore contributes less than 5% of production costs. For aggregates players, such as HeidelbergCement, the immediate benefit may be...
