Cement prices increase for the third time this year


There are about 15 businesses simultaneously increase the selling price of cement by 50,000-80,000 VND, some types increase to 140,000 VND a ton.

From mid-June, a series of cement businesses announced to increase selling prices. Vicem Hai Van adjusted an additional 50,000 dong a ton with bagged and bulk cement, Wallcem cement from 22/6. Along with Tan Quang – VVMI and Vicem Hoang Thach, these businesses are in the group with the lowest price adjustment this period.

Units such as Norcem, Cam Pha, Ha Long, Quang Son… all set the price step of 70,000-100,000 VND a tonne for this adjustment. Particularly, Cong Thanh in the Central region increased the price to VND 140,000 a ton with KPK 50KG PCB40 bags and 50KG KPK bags PCB30.

Company

Additional price (VND/kg)

Application date

Zhongshan

90,000 won

10/6

Norcem

70,000 won

10/6

Cong Thanh Central

100,000-140,000 won

15/6

Tan Quang – VVMI

50,000 won

15/6

Ha Long

60,000-80,000 won

15/6

Cam Pha

60,000-100,000 VND

16/6

Vicem Hoang Mai

70,000 won

20/6

optical coatings

60,000-80,000 won

20/6

Vicem Bim Son

70,000 won

22/6

Long Son

60,000 won

22/6

Vicem Hoang Thach

50,000-80,000 won

22/6

Vicem Hai Van

50,000 won

22/6

Blue river

60,000 won

25/6

Xuan Thanh

60,000 won

25/6

The Vissai

60,000 won

25/6

This is the third time in a year that many cement companies simultaneously increase their selling prices. Compared to the previous two phases, the recent adjustment is much larger in the number of enterprises. In March, there are about 13 cement businesses choose to increase prices. In the second half of May, the market recorded about 10 correction units.

However, the price increase margin this time was lower than in March. At that time, businesses mainly increased the price of cement by about 100,000 VND a ton, some units raised the price to 150,000 VND a ton. Compared to an increase of VND 60,000-80,000 a ton in May, this adjustment has a higher price step.

Input materials continue to be a pressure on cement businesses. Cong Thanh Central – the unit with the highest price increase in this period, said that the price of raw materials increased simultaneously, especially the scarce source of coal. This business adjusted the selling price to “ensure costs in the production process and maintain product quality”.

Vicem Hoang Mai further information, at the beginning of June, Vietnam Coal-Mineral Industry Group increased the coal price by 15% compared to before. In addition, the continuous increase in gasoline prices also becomes a great pressure. “Enterprises have found many solutions to save production costs, maximize the efficiency of fuel use, but cannot compensate,” the unit increased the price of cement by 70,000 VND per ton in this round.

According to the Cement Association (VNCA), coal is the most important input material, usually accounting for about 35-40% of the cost of cement production. Meanwhile, nearly two-thirds of coal must be imported, so the cost of cement production in Vietnam depends largely on coal prices in the international market.

Over the past time, the burden of input material prices has eroded the profits of many businesses. In the first quarter of the year, Vicem Ha Tien’s profit after tax fell by nearly three-quarters over the same period, the lowest profit since the first quarter of 2018. Units such as Vicem Gypsum Cement, Vicem Hai Van, Vicem Hoang Mai… also have unfavorable business results.

Employees of a cement business are working on a production line. Image: HT1

The construction industry continues to face difficulties following the increase in cement prices. According to a project manager at a construction company in Go Vap (HCMC), the cost of basic materials such as cement, iron – steel, sand – stone – gravel, bricks… used to be about 25 -30% in housing construction costs. Recently, this unit has to increase 300,000-550,000 VND per m2 with a quote for raw construction, to 3.5-4.65 million VND per m2 depending on the package. If the price of cement and other construction materials and labor costs have not slowed down, the company must study a plan to increase construction costs.

During the question-and-answer session to the National Assembly on June 9, Transport Minister Nguyen Van The also informed about the price of gasoline and the tension between Russia and Ukraine, which caused the price of construction materials to increase sharply. This makes it difficult for investors to manage costs and manage construction investment costs. For contractors, this group has difficulty in implementing construction, especially for bidding packages and large projects, leading to the mentality of inactive construction, waiting for prices to drop…

The Minister also stated the situation, contractors are afraid at the time of buying petrol, buying materials, transporting at high prices, but when taking over, they pay low prices. This agency will continue to coordinate with the Ministry of Construction to deal with difficulties in price fluctuations of raw materials, fuel and construction materials.

While cement prices increased, steel prices continued to be adjusted down. Recently, Hoa Phat, Viet Italy, Viet Duc… announced to lower the price of steel by 300,000-500,000 VND per kg. Over the past month, steel prices have dropped 6 times with a total decrease of more than 2.5 million VND per ton, depending on the brand and type of steel. Steel and cement are correlated as both are important inputs for the construction industry.

If the downtrend of construction steel is prolonged, VNDirect once assessed, the progress of many projects is likely to be vibrant again, pushing cement consumption demand up.

VNCA believes that domestic cement consumption can grow again thanks to accelerating disbursement of public investment capital and implementing the construction of key transport infrastructure projects. However, the gross profit margin of manufacturing enterprises is likely to face great pressure due to strong competition and pressure from input prices.

Siddhartha

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