The Price Management Department under the Vietnamese Ministry of Finance has turned down the proposal of local cement makers to increase cement prices, office manager of the Vietnam National Cement Association Nguyen Van Diep said.

The new cement price hike is not appropriate at this time, Diep added, explaining that the input prices, including power, petroleum and coal have not surged since April, the Giao duc Vietnam online newspaper reported Jul 9.

The loss of Vietnam Cement Industry Corporation (Vicem), which now holds 40% domestic market share, has been mainly caused by short and medium loans.

Worse still, the global crisis and high interest rate are also putting a heavy burden to local cement retailers, Diep noted.

Ha Tien 1 Cement Joint Stock Company (HT1) earlier this month proposed the department to raise cement prices mark PC40 by VND150,000/t ($7.27) to VND1.71m (excluding VAT) from Jul 4.

Ha Long Cement Joint Stock Company on Jul 4 decided to raise their cement prices by VND150,000/t to VND1.63m.

Vietnam’s cement makers earlier on February increased cement prices by VND60,000/t to VND1.02m and VND80,000 to VND1.14m in the north and the south of Vietnam for the first time, respectively.

In April, the local cement makers decided to increase their prices for the second time by VND120,000/t (11.8%) in the north and VND150,000/t (10.6%) in the south.

Vietnam is forecast to face a surplus of 5-10Mt of cement this year due to the additional operation of 12 more cement plants with a combined capacity of 10.8Mt.

The additional operation of 55 new cement plants next year, with a combined capacity of 66.96Mt amid the local big surplus will be a big challenge for the local cement makers, the Construction Ministry said.