Vietnam demand estimates

Vietnam demand estimates
Published: 29 March 2004

Production units of the Vietnam National Cement Corporation (VNCC), joint ventures, and local cement plants and clinker stations are now running at full capacity to meet expected domestic demand of nearly 7Mt of cement in the second quarter, especially in April and May - the peak months of the construction season.  VNCC has also kept 1.36Mt of cement and clinker in stock so far, the highest volume ever, in order to stabilise market price in the period, including 1.07Mt for the north, 79,795t for the central region, and 207,238t for the south.  The joint ventures will provide the local market with nearly two million tons, while local cement plants and clinker stations are to supply 1.7 million tons in the next three months.  During the period, more than 1Mt of clinker is likely to be imported for local cement production.

In the first quarter, the country’s cement consumption was 5.34Mt, up eight per cent against or 380,000t more than the same period last year. The north consumed around 2.77Mt, the central region 841,083t, and the south 1.73Mt.  Consumption has begun to rise since the beginning of March. In the January-February period, the level was low because the pace of many key construction projects fell away due to the high prices of steel and iron.  Vietnam has nine major cement plants, 16 cement grinding stations and a number of blast furnaces under operation, with a total capacity of more than 18Mt.

VNCC expects to produce and sell 11.5-12Mt of cement this year, joint ventures 7.4-7.6Mt, and local cement plants and clinker stations 6.2Mt. Vietnam will have to import 4.5-5Mt of clinker in 2004 for cement production.  VNCC said 23.57Mt of cement was domestically sold in 2003, including 11.47Mt by VNCC, 6.8Mt by joint ventures, and 5.3Mt by other businesses, up 15 per cent, 17 per cent, 10 per cent and 10 per cent on-year. The north consumed 11.7Mt, the south 7.5Mt and the central region 3.8Mt.

Vietnam’s cement demand is forecast to increase rapidly to nearly 30Mt in 2005, 49Mt in 2010, 63-65Mt in 2015 and 68-70Mt in 2020, from 25.5-26Mt this year.  From now to 2015, the industry is to invest massive amounts in building eight cement plants. Total investment for clinker production is $2.85bn between 2003 and 2005, and $1.7bn in the 2006-2010 period.