The domestic consumption of cement in the first eight months bounced back to a sustainable status, which is being seen a relief for producers with surplus inventories.
Chairman of Viet Nam Cement Association Nguyen Quang Cung told Thoi Bao Ngan Hang (Banking Times) newspaper, “Cement plants are likely to run at full throttle.”
Chairman of Viet Nam Cement Industry Corporation (Vicem) Luong Quang Khai said that his company’s inventory has dramatically fallen. As of August 31, the total inventory was equal to 14 production days.
The Vissai Cement Group shared the same opinion, saying the market demand was better than two years ago.
“We haven’t got detailed statistics, but the production was generally good in the first eight months,” Nguyen Vu Thanh, Vissai Cement Group’s deputy general director, added.
According to the Ministry of Construction, August marked the first consecutive month when cement sales reached five to six million tonnes. Companies in Viet Nam sold 42.53 million tonnes of cement in the first eight months of this year, up 8 per cent year on year, meeting 68.6 per cent of the year’s target.
Of the total, 32.85 million tonnes of cement were sold at the domestic market, up 7 per cent year on year, while 9.68 million tonnes were exported, an increase of 9 per cent year on year.
In August, the country’s cement sales rose 2 per cent from the previous month and 3 per cent year on year to 5.29 million tonnes, despite the rainy season. Exports accounted for 1.1 million tonnes of this total, rising 12 per cent month on month.
In September, the country’s cement sales are expected to increase slightly as many construction projects will restart. The recovery of the real estate market will also contribute to the growth of the cement sector.
“Viet Nam has many advantages in cement production and exports, including abundant raw materials, mountains that make up three-fourths of the country’s total area and long coastlines with ports systems, which are convenient for exports,” Cung said, adding that cement exports will be a good business choice from now till 2025 or even 2030.
Many Asian countries have been exporting huge volumes of cement for a good number of years. Among them, Thailand and Japan have been exporting cement for decades.
Cung said that the competition in cement exports was not only in market shares but also in pricing. Many of Viet Nam’s exports are priced lower than that of other countries, such as rice which is cheaper than that of Thailand.
The current cement export prices fluctuate around US$50 to $55 per tonne, and are lower – below 10 per cent – than that of several countries in the region.