With the rapid development of domestic economy and the increasing pace of overseas investment, infrastructure construction will be vigorously promoted. Cement is an indispensable raw material for industrial development, and the cement industry should also usher in unprecedented development opportunities. However, the problem of overcapacity not only forced China's cement industry to experience an embarrassing "shutdown period", but also made a wedding dress for Vietnam's cement industry with overcapacity.
China's Cement "Stop Production", Imports Surge by 37716%!
In recent years, with the implementation of the policy of capacity reduction in the cement industry, some small and medium-sized cement enterprises have closed down in turn because they can not adapt to the changes in the market environment. The strengthening of market concentration in cement industry has become a major trend. According to the data, the market concentration of the top ten cement enterprises in China has increased from 15% to 36%. Thanks to this, the average transaction price of cement in China is 410 yuan/ton, an increase of 23% over the previous year. In order to stabilize the price situation, China's cement industry has not only pushed forward the "off-peak shutdown", but also expanded the import emergency of high-quality and low-cost cement.
According to customs data, China imported 908,300 tons of cement in 2017, an increase of 2931.70% over the same period last year. From January to March 2018, China imported 1.8317 million tons of cement, an increase of 37716 of 0.08%. The cement imported in the three months of 2018 far exceeds the import volume of the whole year of 2017, which shows the power of "staggering peak and stopping production". Based on the fact that peak staggering production has become a medium and long-term measure, the import demand for cheap cement may expand accordingly. In this case, Vietnam can get the biggest bargain.
Coveting the Chinese Market, Vietnam Lowers the Price of Cement!
Over the years, Vietnam has been coveting the Chinese market, with exports to China reaching $50.6 billion in 2017, a 15-fold increase from 10 years ago! Since China's recent announcement of opening wider to the outside world, Vietnam has been counting its money. According to statistics, the total export volume of Vietnam's vegetable and fruit industry reached 960 million US dollars in the first quarter of this year, the largest increase in Vietnam's history. More importantly, China has become Vietnam's largest fruit and vegetable export market. As far as Vietnam is concerned, it is good to count money by relying on China, and it is bound to take advantage of the situation to catch the train of China's cement market.
Data show that in the first half of 2018, Vietnam's cement sales continued to show good growth, with exports reaching more than 15 million US dollars, an increase of 50% over the same period last year. The Department of Building Materials of Vietnam's Ministry of Construction said that the decline in China's cement production has led to a sharp increase in its imports of cement from Vietnam. In order to strike while the iron is hot, the report issued by the Vietnam Cement Association shows that new cement plants in Vietnam are still being put into operation one after another, constantly increasing cement stocks. This is to open up the Chinese market and withdraw investment funds as soon as possible. But this is just getting burned.
Vietnam still has 26 million tons of production dependent on exports, and China's cement import demand is far less than its excess capacity. Serious overcapacity of cement will inevitably aggravate the imbalance between supply and demand in the market, which will eventually lead to many new cement plants can only reduce the ex-factory price of cement and disrupt the market balance. What's more, Vietnam's small and medium-sized enterprises may not be able to withstand the cost pressure to close their factories in turn. Therefore, to some extent, the Chinese market has become a "monster-revealing mirror" for Vietnamese cement.
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