The pressure of domestic cement consumption increases

Friday  26/08/2022
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Since March, most of Vietnam's main export markets have fallen sharply, in which the markets of Bangladesh, Taiwan, Malaysia, the Philippines, China... have plummeted in both volume and value. The increasingly difficult export has made the cement producers turn to concentrate resources to capture domestic market share.


Since the second quarter, the domestic cement market has recorded fierce competition on selling prices and supportive policies of cement brands to dominate the marketshare.

Since the end of June to present, the price of gasoline has had several deep downward adjustments, freight rates and some essential goods also tend to decrease... Experts say that in the third quarter of 2022, domestic consumption is likely to increase. The southern market has more advantages. Cement prices keep stable and can be adjusted down with a low margin.

In addition, from January 1, 2023, the export tax rate for clinker products will be increased from 5 to 10% in order to limit the export of products that use a lot of raw materials, fuels and non-renewable mineral resources. This factor also contributes to increasing pressure on the domestic market, forcing manufacturers to find ways to reduce selling prices and support customers as much as possible to sell products.

Since the beginning of the year to present, according to analysts, although the domestic consumption of cement in February was the lowest, especially in February, the country consumed just over 3.5 million tons, the reason is due to this time coincides with the Lunar New Year occassion, so construction and business activities slowed down. In March, sales volume jumped 200% higher than in February because after the Tet holiday, construction projects simultaneously carried out construction and implemented business and production plans for the new year.

In the second quarter, sales volume decreased gradually because the projects had passed the time of consuming alot of cement and getting in to stabilized period. 

While the amount of cement consumed in the domestic market from the beginning of the year until now is equivalent to the same period in 2021 - the period also affected by Covid-19, cement exports tend to decrease gradually over the months.

Cement exports again peaked in the first 2 months of the year, then fell sharply in the following months. Until June, clinker export output was only 25,000 tons. The total export volume was only 82% over the same period in 2021.

The cause of the decline in cement exports is said to have been since March 2022, most of Vietnam's main export markets fell sharply. Typically, the markets of Bangladesh, Taiwan (China), Malaysia, Philippines, China ... have plummeted in both volume and value. In particular, the two largest markets, China and the Philippines, suffered a serious decline. This led to a serious decrease in export value.

In 2022, the cement industry has a number of new lines put into operation, contributing to bringing the total designed new capacity of Vietnam's cement industry by the end of 2022 to 11.4 million tons, reaching total capacity of 118 million tons of cement/ year.

Forecasting the situation of the cement market in the last months of 2022, experts stated that there is a positive signal from the significant increase in domestic cement demand with strong disbursement requirements of the Government for many public investment projects in 2022 - 2023 which will partially offset the decline of the export market.