Cement consumption rebounds

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According to the Ministry of Construction (MoC), cement consumption reached 21.5 million tonnes in the first four months, a 20 per cent increase on-year.

A representative from listed Vicem Bim Son Joint Stock Company (stock code BCC) said cement consumption has showed signs of improvement compared to last year. He noted that since March this year total consumption has reached 1.5 million tonnes, an increase of more than 10 per cent compared to the same period last year.

While another representative from Fico Tay Ninh Cemet Joint Stock Company said his company would be running at full capacity this year.

Cement industry inventories have remained low, equivalent to 12-14 days of production.

Exports, which are viewed as a potential solution for the cement industry’s oversupply issues, have seen marked improvement.

In April, Vietnam’s cement exports rose 46 per cent compared to the same period last year. The cement export price also rose slightly by VND80,000-VND100,000 ($3.8-$4.7) per tonne.

Chairman of Vicem Luong Quang Khai supported the aforementioned idea, saying export was key to helping ease oversupply pressures.

 “Exports will help offload surplus inventories and attract foreign currencies. At current, clinker and cement export prices are holding at around $38 and $55 per tonne, respectively.

The group aims to export 2.6 million tonnes of both clinker and cement this year.

The Ministry of Construction has estimated this year’s domestic cement production  at 62-63 million tonnes, up 3 per cent on-year. Of this, up to 49 million tonnes is planned to be sold domestically, the rest would be exported.

Vietnam is expected to continue experiencing oversupply issues due to far too many cement plants in operation. At present, there are 106 cement factories in the country.

While cement demand was weak in 2012 and 2013, capacity increased quite quickly. In 2012, the sector’s total capacity was 68.5 million tonnes while total consumption was just 45.2 million tonnes, just 67 per cent of total production.