CEMENT MARKET CONSUMPTION RECOVERS THANKS TO SUPER TRANSPORT INFRASTRUCTURE PROJECTS

According to the Vietnam Cement Association, increasing the use of cement in the construction of transport infrastructure works, especially roads in the southern provinces, can help solve the problem of consuming this type of construction material in the coming time.

Entering the third quarter of 2023, KIS Securities believes that cement consumption demand in the market will continue to weaken when the rainy season arrives. However, the El Nino phenomenon is likely to increase the number of dry days in the third quarter, which could improve the cement consumption situation of the entire industry.

This unit forecasts that total cement consumption in the second quarter of 2023 will reach 23.8 million tons, up 8% compared to the previous quarter and unchanged compared to the same period last year. In the export market, this consumption channel in the second quarter of 2023 continued to "take the hit" from inflation from major markets such as China, Bangladesh, and the Philippines, causing both output and export value to decline to a record low.

Export output in the second quarter of 2020 reached only 7.8 million tons, with a turnover of 347 million USD. Of which, exports of this item to China reached only 300,000 tons, down 78% compared to the first quarter of 2023.

VNCA believes that cement and clinker exports will continue to face difficulties in 2023 as the construction demand of the main market, China, remains sluggish. Although China has reopened, its real estate market has not yet recovered, leading to difficulties in our country's cement and clinker exports.

Currently, public investment is considered the driving force of economic growth in the context of consumption and export drivers being affected by inflationary pressure, rising exchange rates and global economic fluctuations.

According to calculations by the General Statistics Office, if public investment disbursement increases by 1% compared to the previous year, GDP will increase by 0.058%. In addition, focusing on promoting public investment is also expected to create spillover effects to many sectors.

In particular, the construction materials group (construction stone, cement, asphalt, steel) benefits directly right after the site clearance stage, entering project implementation, until the completion of project construction activities.

To solve the difficulties for the Cement industry, the Vietnam Cement Association proposed to remove the output bottleneck by increasing the construction of housing, especially social housing, urban areas, roads, etc., especially roads in the Southern provinces to both create output for products and have convenient infrastructure.

In the immediate future, cement enterprises should seek to develop new and improved products to increase their competitiveness in the market in order to attract more customers and increase sales. Expanding the market and finding new customers, including export markets, is also an important solution. This helps enterprises increase sales and minimize the impact of domestic surplus production.

Synthesis of many sources