This is an affirmation of Mr Nguyen Quang Cung, Head of the Construction Materials Department under the Ministry of Construction (MOC), in response to the increase in steel price when the realty market warms up.
The warming up of the realty market since the beginning of 2009 has improved demand for the two strategic products, namely steel and cement. In case of cement, consumption power in April 2009 witnesses a growth of over 17 percent against the same period of 2008 and a slight increase compared to that in the first three months. There exist many concerns that cement price can possibly go up, following the trend of steel. However, the Construction Materials Department under the MOC has just confirmed that there will be no fever or shortage of cement.
According to Mr Nguyen Quang Cung, more demand for cement industry is a good signal. The MOC does not worry about a price fever but an excess supply since in QII 2009, six more cement factories will come into operation. Though the consumption volume of cement in April is higher than that in the first months of the year, the increase is estimated to be 1-2 percent only since rainy season comes early in the South. When demand is stable and supply promises to be profuse, an increase in cement price or a shortage of cement like it was in 2008 is impossible.
“Cement regulation in the Southern market has new advantages,” says Mr Cung. This market is no longer too strict to accept such familiar brand names as Ha Tien 1, Ha Tien 2, Holcim Vietnam, Tay Ninh and Binh Phuoc, etc. It now opens to other brand names as well. The reason for the local cement fever and shortage in 2008 lies in the fact that the Southern market only accepted mentioned above brand names while the total production output of such factories reached a little bit over 7.3 million tones. Meanwhile, some 17-18 tonnes of cement were demanded.
This year, the situation has changed. Thanks to strong investments made in production system, the output of clinker and cement all increases.
The Construction Materials Department attributes the increase in cement consumption to starts-up of many projects, especially when the real estate market recovers. According to the Department, in the first four months of 2009, the whole country produces some 14 tonnes of cement, finishing 32.2 percent of the year’s plan. In the first three months, cement gets consumed slowly. However, after April, when the construction season starts in the South, the volume of cement consumed goes up quite significantly, reaching 4.5 million tones.
“The demand for cement in 2009 of the whole country will range between 44 and 45 million tones. The designed capacity of the whole industry already reaches 50 million tones, being able to meet demand. It is estimated that some more factories will be put into operation from 2010. the difference between supply and demand will be about five million tones, which is suitable with Vietnam market,” states Mr Cung.
Luong Tuan
Vietnamese
