Cement, Steel Prices to Remain Stable

Cement, Steel Prices to Remain Stable
Published: 25 August 2006

Prices of cement and steel in Vietnam will still be stable as at present despite a recent petrol price hike leading to the increase in prices of many goods, market researchers forecast.  An official from the Vietnam National Cement Corporation (VNCC) said fuel price hike has pushed up costs for producing one tonne of cement by VND7,000-8,000. However, his corporation has not yet planned to raise cement prices. 
 
He added from now to the end of this year, VNCC’s price of cement will still stand at VND740,000-760,000 a ton in the north and VND940,000-960,000 in the south. 
 
The stability in cement prices of VNCC which currently holds a 50% market share in the country will make units outside the corporation difficult to raise their selling prices because they are worried about losing market. 
 
The official also said domestic cement consumption will increase to 12Mt in the remaining months of this year but the combined capacity of existing cement plants nationwide together with the stockpiled cement volume will be enough for the demand and stabilize the market. 
 
Market researchers also forecast that steel prices will not rise due to stagnant consumption. At present, the supply of the product still doubles the actual demand while the need for construction steel does not increase, causing a huge surplus of completed steel products. 
 
Nguyen Tien Nghi, vice chairman of the Vietnam Steel Association (VSA) said costs for production of one ton of steel has increased by VND25,000-30,000 due to fuel price rise. In addition, import prices of steel ingots are tending to increase by some $10 a ton. In spite of this, he added, prices will still stand at VND7.5-7.6 million a ton of rolled steel and VND7.7-7.8 million a ton of steel bars in the north, and in the south the price of a ton will be VND100,000-150,000 higher than the north. 
 
Over the past three months, steel sales in the domestic market have continuously dropped. In August alone, the consumption is estimated at only some 180,000 tons. Steel sales in the coming time will see no positive signs, forecast the VSA.