Vietnam assures consumers on supply and prices

Vietnam assures consumers on supply and prices
Published: 19 June 2006

Vu Van Hiep, deputy general director of the Viet Nam Cement Corporation (VNCC), this week assured the nation’s construction companies that there would be no serious shortages of cement and no additional price hikes during the peak of this year’s construction season in May, June and July.

Addressing reports of cement companies creating artificial shortages by stockpiling supplies to drive prices higher, Hiep said such behaviour would not be tolerated by the VNCC and its subsidiaries. The concerns stem from shortages and higher prices earlier this year and during the same period last year, he said, and delays to the opening of several large cement factories.

Although cement prices have gone up, by between VND15,000 and VND20,000 per tonne during mid-May, the increases fall within the Government’s set price range, Hiep said, adding that slightly higher prices would not significantly impact the overall cement market.

He said the VNCC, which now holds a 46 per cent market share in Viet Nam, has reserves totalling 1.1Mt, down from a two-month peak in March and April of 1.8Mt. This reserve, coupled with a large number of cement producing companies operating in the market, should guarantee a steady supply and stable prices, he said.

Nguyen Van Thien, chairman of the Viet Nam Cement Association, said his organisation would work with the Ministry of Construction to stabilise the nation’s cement market, noting both organisations should learn from previous cement price hikes.

Cement on the domestic market now trades at VND750,000 to VND800,000 per tonne (approx US$50) in the north and VND900,000 to 950,000 (approx US$59) in the south, with consumption projected to reach up to 32Mt this year, a 10 per cent increase from 2005, according to the VNCC.