As rising electricity prices push up production costs, Vietnam's major cement manufacturers jointly announced a push up in quotations from October 20, 2024.
The price increase increased the price of cement by VND50,000/mt for most manufacturers, while Vessai Cement chose to increase slightly by VND46,300/mt. According to representatives of the Thành Thang Group, the price increase in electricity in Vietnam has increased by 4.8 % since October 11, which has seriously affected the cost of cement production. "Despite our efforts to reduce production costs, such as through waste heat recovery, this has not fully offset the impact of rising electricity bills," the representative said.
Currently, electricity costs account for 15%-20% of the cost of cement production in Vietnam. In addition to electricity, volatile coal and packaging prices due to intensifying global geopolitical conflicts have further put pressure on cement producers.
The Vietnam National Cement Association pointed out that the selling price of cement in Vietnam has been lower than the cost of production for many years, and it is necessary to increase the price to ensure business stability. Without these adjustments, Vietnam's cement industry will struggle to survive.
As production costs continue to rise, more cement manufacturers in Vietnam are expected to adjust prices further in the coming weeks.
From January to September 2024, Vietnam's domestic cement consumption totaled 41,58 mln tons, and domestic demand stagnated. At the same time, Vietnam's cement exports fell to 14,95 mln tons, a year-on-year decrease of about 3 %; The export volume of clinker fell to 765 thousand tons, a year-on-year decrease of about 5 %; The total export value of cement and clinker was US$863 million, a year-on-year decrease of about 15 %.
Among them, Vietnam's domestic cement consumption reached 425 thousand tons in September, down 14 % month-on-month and 6 % year-on-year. In terms of exports, the total export volume of cement and clinker fell to 198 thousand tons, a year-on-year and month-on-month decrease of 14 % and 16% respectively; Cement shipments fell to 129 thousand tons, down 7 % year-on-year and 21 % month-on-month; Clinker exports were about 69 thousand tons, down 23 % year-on-year and 2 % month-on-month.
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