Vietnam faces an increase in oversupply

Vietnam is expected to increase its supply glut in the run-up to 2020, according to Vietnam Net. By 2020 total domestic cement capacity is expected to reach 120-130Mta while domestic demand is forecast to increase by 5-6Mta to reach 82Mt by 2020. This would result in an oversupply of 36-47Mt.

The Vietnamese cement industry has been raising its supply by 6.8Mt last year as Song Lam cement plant's first phase and Long Son cement works came online. In addition, a further five projects are under construction and are on schedule to be completed by 2020, adding a further 12.7Mta to the total.

In response to the oversupply, Nguyen Quang Cung, chairman of Viet Nam Cement Association (VNCA), has said that the real capacity turned out to be higher than what was estimated thanks to improvements in technologies.

Nguyen Quang Cung also commented on the situation in China, which is facing a surplus supply of 600-700Mt. This has in turn increased the competition in the cement and clinker export market. Therefore, the chairman suggested that cement producers should be actively searching for other export markets.