Domestic consumption of cement in 2022 has reached 62.68 million tons, roughly equivalent to the consumption levels of 2021. The forecast for 2023 predicts consumption will be below 65.5 million tons.
Despite a significant improvement in the export of cement and clinker to traditional markets such as Taiwan, Bangladesh, and Malaysia in December, the overall export performance of these products in 2022 has seen a sharp decline compared to the previous year.
This decline is largely attributed to China's Zero Covid policy, as well as issues with defensive taxes imposed on some enterprises importing from Vietnam in the Philippines market.
As a result, the total export of cement and clinker in 2022 reached only 30.65 million tons, a decrease of 33% from the same period in 2021. Cement exports alone accounted for 15.68 million tons, equating to 93% of 2021 levels, while clinker exports reached 14.97 million tons, representing only 80% of 2021 levels.
The total value of foreign currency earned from the export of cement and clinker in 2022 was $1.36 billion, a decrease of $398 million compared to 2021.
Ultimately, the total consumption of cement and clinker in 2022 was 93.33 million tons, significantly lower than the 108 million tons consumed in 2021.
The cement industry in 2023 is expected to continue facing a number of difficulties, as input costs such as coal prices, shells, wages, and potentially electricity prices continue to rise. Meanwhile, domestic consumption is projected to remain sluggish, as the recovery of civil construction is slow and disbursement of public investment is lagging. The real estate market is also expected to remain subdued as the state continues to tighten the issuance of bonds and real estate credits.
Exports are also expected to remain challenging, as cement and clinker importers continue to implement protectionist policies for domestic production, and technical barriers to trade continue to be a concern. The Philippines, for example, has imposed anti-dumping duties on cement imports, and China has blocked the seaport due to its Zero Covid policy, which is expected to end in the first quarter of 2023. Furthermore, from January 1, 2023, Vietnam has imposed an export tax on clinker from 5% to 10%.
The industry is also facing internal difficulties, as the supply of cement exceeds the demand. In 2023, a number of new cement production lines such as Line 4 - Long Son Cement, Line 3 - Xuan Thanh Cement, Ocean Cement, and Long Thanh Cement will come online, bringing the total cement supply to around 120.7 million tons.
However, demand for domestic consumption is only forecasted to be 64 - 65.5 million tons, leading to increasing competition among cement production units as they face pressure to consume their products. This may result in some production units having to stop their kilns or reduce kiln productivity.
Read more: Cement Industry Report
Cement Industry Report - December 2022