Vietnam cement prices expected to recover

Vietnam cement prices expected to recover
Published: 02 February 2010

With Vietnam’s national economy will gradually recover in 2010, resulting in a slight increase in the prices of construction materials such as steel and cement.

It is predicted that construction materials will experience minor fluctuations in prices due to soaring input costs on the world market.

As the Government’s stimulus measure to allow 10 percent in VAT will expire by the end of this year, companies and joint ventures under the Vietnam Steel Corporation will increase in January 2010 by VND25,000-41,000/tonne, up 2.5-4.8 percent over the previous month.

At present, cement trades at VND858,000-1,120,000/tonne, including VAT. In the north, the cement price stands at VND890,000-1,120,000/tonne, while in the south the figure is higher at VND1,100,000-1,400,000/tonne.

According to the Ministry of Construction, total demand for cement in the domestic market this year will reach 50-51 million tonnes, up about 13 percent over last year. It is predicted that supply will exceed demand by 5 million tonnes.

The Ministry has asked the municipal and provincial People’s Committees to stop approving new cement production projects. It also requested the Vietnam Cement Corporation and their cement producers to seek export markets to balance supply and demand.

Cement production and consumption deceased sharply in the first quarter of last year, but increased in the second and fourth quarters thanks to the Government’s stimulus package which reduced the VAT by 50 percent.

In short, the price of cement should remain stable on the domestic market, perhaps seeing a slight increase of VND10,000-40,000/tonne despite a possible increase in input costs, including coal, oil and electricity expenses.