Cement price rigging claims

Cement price rigging claims
Published: 19 August 2004

Taiwan: Two ruling Democratic Progressive Party lawmakers urged the Cabinet-level Fair Trade Commission (FTC) Wednesday to rein in what they called price rigging and market monopoly by local cement makers.  Legislators Tuan Yi-kang and Chen Chin-teh made the call at a joint news conference.

According to Tuan, domestic cement consumption declined from 26.52Mt in 1994 to 14.85 million tons last year and the production capacity utilization rate also dropped from 95 percent to 65 per cent during the same period.

However, Tuan said, the domestic cement price has not fallen in line with this downward trend. On the contrary, the price has skyrocketed from NT$1,300 per ton to NT$2,250 in the past three years.

Tuan claimed that domestic cement manufacturers have monopolized the market and rigged the price by preventing imports of lower-priced cement from the Philippines and South Korea, imposing a quota control system on cement storage facilities at various wharves and other unfair trade measures.

Worse still, Tuan claimed, local cement makers have colluded to cut production to create a false "short supply" phenomenon. Cement makers also at times export their "surplus" products abroad at the low price of NT$761 per ton, he added.

Tuan said cement makers’ market monopoly and price rigging measures have whipped up domestic consumer prices, housing prices, public construction costs and have even hindered domestic economic growth and progress in typhoon-stricken regions.

Tuan demanded that the FTC launch a probe into the cement supply and demand situation and push the cement trade to return to acceptable market mechanisms.

If the commission fails to take action, Tuan said, he will not rule out the possibility of asking the Control Yuan, which oversees government operations, to investigate the commission’s operations.

Speaking on the same occasion, Legislator Chen said cement production is a polluting and high energy-consuming industry and that local cement makers should import lower-priced cement from abroad or set up production facilities in other countries instead of promoting cement exports.