The Industrial and Trading Information Centre under the Ministry of Industry and Trade prices and production of construction materials have gradually increased on higher demand. However, market authorities forecast that there will be no major changes in prices or scarcity in the last months of 2009.
The cement consumption in April 2009 surged more than 17 per cent over the same period of 2008 and higher than previous months of 2009. Many predicted a price surge in cement as steel prices have advanced. Nevertheless, the Construction Material Department of the Ministry of Construction affirmed that there would be no cement price fever or shortage.
According to the Ministry of Construction, six cement plants with combined annual production output of 5.3 million tonnes will be put into operation in the second quarter of 2009 and the rainy reason has come; thus, the demand for cement will fall. Larger supply but unchanged demand will keep the cement prices stable in 2009 as in 2008.
The cement supply regulation in the southern market is easier as users accept more trademarks. Grinding facilities operated by Cam Pha, Cong Thanh, Hoang Long and Lam Thach cement companies will be put into operation and they will supply a large quantity for the market.
The Ministry of Construction estimated the cement demand in Vietnam in 2009 at 44 - 45.5 million tonnes, a rise of 11 per cent over 2008. Designed capacity has reached 50 million tonnes per annum, enough to satisfy the demand. Next year, 2010, several new cement plants will be put into operation and cement supply will exceed the demand by 5 million tonnes.
Like cement, there will be no price fever in steel. According to the report released by the Vietnam Steel Association, Russia and Ukraine are exporting their steel products to Asian markets at attractive prices. China is increasing their stockpiled steel to boost their domestic production.
Vietnam is near China and ASEAN countries where steel prices are lower in Vietnam; thus, it will face direct price competition. As a result, the steel price is forecast to be quite stable this year.
Steelmaker in Vietnam churned out 1.84 million tonnes in the yer to date while the consumption only reached 1.57 million tonnes. Steel prices on the market are now standing at VND10.4 million per tonne.
The report of the Ministry of Industry and Trade said that, among construction materials, steel, brick and stone had highest price rises in the past months. Prices of small bricks and large bricks rose from VND800 and VND1,000 apiece to VND1,000 and VND1,200, respectively. Steel retail price was also added VND1,000 per kilo. Prices of macadam has risen by VND27,000 to VND125,000 per cubic metre. However, price hikes did not set by producers but retailers.
According to dealers, the price rise is caused by higher fuel prices. In addition, higher demand is also an important factor for dealers to push up prices.
Luong Tuan
Vietnamese
