Cement industry surpasses 85 million tonne target
11/6/18 4:39 PM
High demand, especially in global markets, has helped the cement industry surpass its annual sales target of 83-85 million tonnes in just 10 months.
According to the Ministry of Construction, the cement industry sold 85.23 million tonnes of cement products in the first ten months of the year, a massive 51% increase against the same period last year.
Exports accounted for 26.05 million tonnes, surging sharply by 65% year-on-year. The high growth helped the industry surpass the export target of 18-19 million tonnes set for 2018.
Mainland China has become the largest importer of clinker and cement from Vietnam with 6.56 million tonnes valued at US$235 million in the first three quarters of the year. The Philippines, Bangladesh and Taiwan followed with 4.75 million tonnes, 5.64 million tonnes and 1.23 million tonnes, respectively.
According to analysts from Saigon Securities Inc, Vietnam’s cement market could benefit from lower production in China in the wake of the country’s new policies. By the end of 2017, China had shifted from being a global exporter of clinker - a semi-product used in the production of cement - to an importer of cement. The country closed a series of cement plants from November 2017 to March 2018 because of environment pollution and a shortage of electricity during the winter.
China faces a shortage of electricity during the winter because the nation needs more electricity for heating. Cement production is one of the industries that consume a large volume of energy.
Demand for cement imports in China had increased significantly, leading to an increase in Vietnam’s cement exports, the analysts said, noting that China is the world’s largest cement producer with an annual capacity of about 2.5 billion tonnes, accounting for nearly 60% of the world’s capacity and roughly 25 times higher the capacity of Vietnam.
In the domestic market, the consumption of cement products was also forecast to keep rising from now to the year-end thanks to high demand from local property developers wanting to complete projects before Tet (Lunar New Year) and whilst the weather is favourable for construction.
The Ministry of Construction’s Building Material Department estimated that the industry would also reach its sales target of 65-66 million tonnes in the domestic market set for 2018.
The product’s local consumption in the first ten months of the year stood at 59.18 million tonnes.
On top of Vietnam’s large cement capacity, the list of cement projects that are expected to come into operation after 2018 include some very large factories. These include Song Lam Cement’s production lines 3 and 4 with a total capacity of 3.8 million tonnes per year, Thai Nguyen Group’s Ha Tien Cement Project in Binh Phuoc with an annual capacity of 4.5 million tonnes and the Tan Thang Cement Project in Nghe An province with an annual capacity of 1.8 million tonnes.