Vietnam's cement exports fall, domestic market competition is fierce

      Vietnam's cement export is increasingly difficult, causing units to focus on the domestic market. From the second quarter onwards, there has been fierce competition in value in Vietnam's domestic market and various cement brands have introduced support policies aimed at capturing the market.

      From January 1, 2023, the export tax rate on cement volume will increase by 5% to 10%, aiming to restrict the export of products using non-renewable mineral resources, raw materials and fuels. This factor has helped to increase the pressure on Vietnam's domestic market, so that units must find ways to reduce prices and provide maximum support to customers for sales performance.

      The Vietnam Cement Association said that while civil construction and real estate projects are still limited, a series of expressway projects in the 2022-2025 period are expected to help the cement market as a channel to ease the pressure on production and operation.

      The sharp drop in cement exports to markets such as China, the Philippines, Bangladesh, and Peru has led to an increase in cement inventories. However, the Vietnamese government has strongly urged the public investment projects to speed up the disbursement of investment funds in 2022-2023, resulting in a significant increase in domestic demand for cement in Vietnam. To a certain extent, it has made up for the decline in the export market.

      When evaluating the year-to-date market, experts in the industry said that although the domestic cement sales volume in Vietnam in the first two months of this year will be at its lowest level, especially in February, the national cement sales volume was only 3.5 million tons, but the reason is that February coincides with the Spring Festival. due to the slowdown in construction and production and operation activities.

      In March, after the Spring Festival holiday, a series of projects started construction, and the production and operation plan for the new year was implemented. Cement sales continued to rise, an increase of more than 200% compared with February.

      In the second quarter, cement production declined gradually. The reason for this is that each item has been stabilized through a large number of purchases. It is worth noting that after three adjustments to the cement price, the cement price has increased from the price announced at the beginning of the year. At the same time, in the post-COVID-19 period, due to economic tensions, the decline in household savings funds led to a decline in civil construction.

      However, cement clinker exports peaked in January and February and fell sharply in subsequent months. As of June, cement clinker production was only 25,000 tonnes, and exports were equivalent to only 82% of the same period in 2021.

      The reason for the decline in Vietnam's cement exports is that the main export markets of Vietnam's cement have all declined since March. Cement exports to markets such as Bangladesh, Malaysia, the Philippines, China, and Taiwan Province have both dropped significantly in volume and value.