Further Hikes Forecasted for Cement Price

Further Hikes Forecasted for Cement Price

The cement price will likely increase in the last quarter of this year due to a higher demand for the product, government solutions to stabilise prices and the state of the economy, estimates the Ministry of Trade.

The forecast sounds feasible, especially as the Vietnam Cement Corporation (VNCC) also affirmed recently that the cement market in the last five months of the year will see many negative changes caused by environmental impacts and an increase in the price of goods.

VNCC, however, committed to maintain a stable cement price stable to the year’s end in line with the government’s instruction even though the cement industry’s operations have been greatly affected by changes in the price of its input materials, such as steel, petroleum, clinker and imported plaster, and the hike in transport fees so far this year.  

The cement demand from now to the year’s end is estimated at 13.5-13.6 million tones, up 6-6.5 per cent over the same period last year, because construction works are near completion and the government has urged big cities and provinces to boost their economic growth. This year's domestic cement demand is expected to surpass 26 million tonnes, according to VNCC.

Under the plan set for the last two quarters, VNCC will produce and sell more than 6 million tones of clinker and cement. To reach this target, VNCC affiliates need about 370,000 tonnes of peat and 170,000 tonnes of additives. In the second quarter alone, it produced and sold 2.9 million tonnes, including 2.73 million tonnes of cement.

VNCC is reported to reserve 1 million tonnes of clinker, 150,000 tonnes of powder cement and 200,000 tonnes of packaged cement for the last quarter of 2004 and early 2005.

Sales of cement are also forecasted to fall in the third quarter, the rainy season, said VNCC. At present, prices of cement produced by reverter furnaces are fluctuating at VND720,000-760,000/tonnes in the North of Vietnam and VND840,000-920,000 tonnes in the South.

Vietnam's annual demand for cement now sees an average growth rate of 10-12 per cent and is forecast to reach 47-48 million tonnes by 2010. The industry is at present able to produce 16.4 million tonnes of clinker and 24 million tonnes of cement.

• Hai Duong