Property market drives rise in cement demand
Property market drives rise in cement demand
Vietnam's cement consumption increased six percent year-on-year to touch 53.22 million tonnes in the first ten months of 2014, according to the Construction Ministry's Building Material Department.
Of the total, 41.54 million tonnes were consumed in the domestic market, up 8 percent compared with the corresponding period last year, while exports rose slightly by 1 percent to reach 11.68 million tonnes.
The ministry said that the increase was due to the high demand from property projects that resumed construction, even though the local property market has not recovered completely.
The inventory of cement in October reached 2.84 million tonnes, equivalent to 13 to 15 days of production.
Le Van Toi, head of the building material department, said that the last two months of this year are also the construction season. Many projects will promote their constructions, leading to growth in cement consumption as well as other kinds of building material products against previous months.
By the end of this year, cement consumption is expected to gain a growth rate of 7-8 percent in the domestic market, and 5-6 percent in the export markets, he said.
However, the cement industry still faces several challenges in terms of high capacity and cheap export prices, according the Vietnam Cement Association.
Vietnam has many cement factories, and by the end of 2014, the total designed capacity of the cement factories nationwide will reach 85 million tonnes annually.
Meanwhile, the Ministry of Construction estimated the cement industry's sales of cement to reach 62 to 63 million tonnes in 2014, including 48.5 to 49 million tonnes for local use and 13.5 to 14 million tonnes for exports.
Cement export is the best way to resolve the issue of high inventory in the local market, said the association, but the export price is always at a low rate of 50 USD to 55 USD per tonne for cement and 38 USD per tonne for clinker. The export price in the regional market is 75 USD per tonne for cement of the same variety and quality, reported Thoi bao Kinh te Vietnam (Vietnam Economic Times) newspaper.
Vietnamese cement exports are competitive in price, but the local enterprises have not made profits from exporting cement, it said.
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