Vietnam cement market recovers in H1 2025 despite export challenges

Vietnam's cement industry showed signs of a steady recovery in the first half of 2025 after grappling with oversupply and weak domestic demand for two years, according to Vietnam's Ministry of Construction. The rebound was primarily driven by increased public investment in infrastructure projects and a significant reduction in input costs.

Cement production rose by 18% year over year to nearly 50 million mt, while overall sales volumes reached 54 million mt, up 14%. Domestic demand contributed significantly to the rebound, with consumption climbing 18% to 37.5 million mt.

Exports increased moderately. Overseas shipments rose 6% to 17 million mt, driven by a 19% increase in clinker exports. Export revenues reached roughly $635 million, a 1.7% year-over-year increase. Key export destinations included the Philippines, the US, Singapore and Malaysia.

Despite higher export volumes, pricing remained under pressure due to intense global competition. To maintain competitiveness, Vietnamese producers kept export prices relatively stable at late-2024 levels. As of Aug. 20, domestic cement and clinker inventories stood at about 4.5 million mt, roughly equivalent to 20 days of output.

Lower input costs, particularly a sharp decline in imported coal prices, which fell 22.6% compared to last year, supported improved profit margins. However, rising electricity prices continue to add pressure on producers' operating costs. Market participants in the Asia region anticipate that the recovery will continue through 2025, supported by domestic infrastructure development and a gradual rebound in the construction sector.

Still, export prospects face headwinds. While South and Southeast Asia remain target markets, buying activity has slowed, particularly in South Asia. Bangladesh, for example, witnessed weaker demand due to the ongoing monsoon season and reduced construction activity. Additionally, recent US tariffs on Vietnamese cement reportedly increased to 20%, adding uncertainty to trade flows.

"The tariff issue has led to a more cautious tone across the region," said a Southeast Asia-based trader. "Many buyers are waiting to see how the market reacts before making commitments."

Platts, part of S&P Global Energy, assessed cement (ASTM type I) FOB Vietnam at $32/mt and cement clinker FOB Vietnam at $32.50/mt on Aug. 14. unchanged week over week.