Domestic consumption of cement and clinker shows signs of improvement, exports continue to increase

Vietnam: domestic cement demand returned in T10, domestic consumption volume was higher than the monthly average in Q3, increasing by 6.9% over the same period. In particular, the southern region recovered strongly (up 2.4 times compared to the average of Q3) after being eased the distance. Meanwhile, exports have maintained a steady increase from July to now, but may face many difficulties in 2022.


CEMENT INDUSTRY HIGHLIGHTS 11-2021


In November, cement production continued to increase compared to the previous month, and reached the same output as the months before the 4th COVID-19 epidemic took place.


Meanwhile, domestic consumption is gradually recovering month by month, but is still only ~81% compared to the average consumption in the period from March to June (before the domestic epidemic spread). Specifically, the current cement consumption volume of the North is ~78%, the Central region ~86%, the South ~83% compared to the average consumption of the month before the epidemic.


Accumulated 10M-2021, domestic consumption reached 51.0 million tons, up slightly +1.44%



Export of cement and clinker continued to have good growth. November is the fourth consecutive month of cement exports reaching over 4 million tons.


The point is worth noting in export, although the export volume of finished cement maintained a good growth momentum in the first 11M of the year, even during the months of social distancing. However, clinker still accounts for a large proportion (~60-65%) of the industry's total exports.


However, in order to limit the export of non-renewable mineral resources, the Government recently issued Decree No. 101/2021/ND-CP. Accordingly, the export tax on clinker products will be increased from 5% to 10% for HS code 25231010 (used to produce white cement) and HS Code 25231090 (other) from January 1, 2020. 2023.




OUTLOOK DEC. 2021 & 2022


For domestic consumption:

In the last month of 2021, domestic consumption is expected to be difficult to recover strongly. However, the prospect of domestic consumption will increase well thanks to the policy of promoting infrastructure projects/works and public investment.


For export:

Although the increase in export tax on clinker products according to Decree 101/2021/ND-CP has not taken effect yet in 2022. But the export outlook in 2022 may be more gloomy, due to the demand for imported cement. China's cement (market consumption ~50-55% of cement & clinker exports of Vietnam) may be reduced because the Chinese real estate market is facing the risk of crisis.


If the export situation is "poor", the competitive pressure among domestic cement brands will increase, because Vietnam's cement industry in the last 2-3 years has started to have excess capacity and depend heavily on export.


Source: Extracted from Vietdata's December Cement Industry Report