Cement industry hit by higher coal prices

Vietnam’s cement industry has been seriously hit by surging coal prices, a major fuel used to produce cement, said cement producers at an industry seminar in Hanoi March 9. The prices of coal have so far increased from VND110,000 to VND120,000 (about US$7) per ton, according to producers.  

Also, diminishing supplies of coal for cement kilns are hurting the operations of the domestic cement industry, said Le Van Chung, deputy chief executive of the state-owned Vietnam Cement Corp. (VNCC), the country’s largest cement manufacturer. 

Currently, VNCC needs 4000t of coal each day for production, but the coal sector only provides about 2000 tons, Mr. Chung said.  

In related news, VNCC is forecast to undersupply the industry this year by 6.5Mt of cement, as the estimated consumption volume will be 29.1Mt while cement plants will only produce 22.6Mt.  The corporation calculated that the domestic average cement demand would increase around 4.5Mta between 2004 and 2005 while annual production capacity would only rise 2.5Mt 

 Currently there are 10 cement projects with total capacity of 17.2Mt under-construction.