The demand for cement in Vietnam was low in the opening months of 2006, at just one half of the consumed volume in the first half of 2005, according to the Trade Research Institute. Despite decreased demand, however, cement producers still raised prices. Since March 2006, five cement enterprises have gone up VND25-40,000 per tonne, driving the retail price up VND1000 - 1500 for 50kg bags.

Currently Holcim, Nghi Son, Ha Tien II and Chinfon sell at VND48,000 for 50kg while Cotec sells at VND47,000. Ha Tien I has announced no official price increases and sales agents instead spontaneously went up to VND49,000 per 50kg bag.

In general, cement produced in March saw an increase of 2.8 - 4.3 per cent over previous levels, but the slight increase is still within the five per cent set by the Ministry of Construction. In addition to raising the selling prices, some enterprises have decided to cut commissions, discount rates, bonuses and transportation fees for agents, who responded by arbitrarily raising prices VND12,000-15,000 per tonne and ending free delivery.

The Vietnamese government has yet to approve proposals by cement manufacturers to raise prices. The Ministry of Trade has forecast a slight increase in demand in April of 2.5 - 2.8Mt.