Vietnam cement stocks rise to 4Mt in Jan-Oct

Vietnam cement stocks rise to 4Mt in Jan-Oct
Published: 19 November 2012

Tagged Under: stocks Supply-Demand market Vietnam 

Vietnam’s cement inventory rose by 51.3% YoY to 4Mt in the first 10 months of 2012, including 1.4Mt of Vietnam Cement Industry Corporation (Vicem), according to the country’s Ministry of Industry and Trade.

The economic slowdown and the government’s policies to cut public investment were the main reasons for the huge inventory, said Tran Van Huynh, chairman of the Vietnam Building Material Association, part of the Ministry of Construction. In addition, the stagnant real estate market has led to many construction projects being halted, lowering cement consumption.

However, former Construction Minister Tong Van Nga, said the rise in stocks resulted from the companies’ non-compliance with the master development, particularly in the area of new projects. The master plan put demand at 46.8Mt in 2010, rising to 62.5Mt by 2015 and between 68-70Mt by 2020. But last year, total cement output reached 67Mt while total sales barely made 49Mt. Despite the glut, producers still received approval to build new plants and next year, six new plants are due to come online, adding a further 6.72Mta of capacity.

Looking forward, analysts expect the cement surplus to persist in the coming years if the government does not take drastic action, including stimulating demand and reviewing current capacity projects.