Prices of certain products projected to increase

The prices of four key products, including petroleum, steel, cement and fertilizer would see the upward trend in the time to come, according to the Ministry of Planning and Investment (MPI).

Crude oil price to hover around $70-80 per barrel

In early April 2010, the crude oil price in the world market increased continuously. The price once hit the highest peak at $86,73 per barrel in New York, while Brent sea oil in London once hit $85.88 per barrel, the 18 month high, thanks to the good news about the recovery of the US economy.

However, since mid April, the crude oil price has continuously fallen to $82.25 per barrel due to the worry about the weak consumption and due to the stagnant operation of air carriers caused by the Iceland’s volcanic eruption. The light sweet oil closing price in New York on April 20 was $83.45 per barrel (delivery in May), while Brent sea oil in London $84.80 per barrel (delivery in June).

“With the current conditions of the world’s economy and the bright market prospect, the oil price would continue to hover around $70-80 per barrel for many more months,” the report by MPI, which consults with many experts, reads.

Meanwhile, in the domestic market, the petroleum prices have been kept stable thanks to the Government’s decision to ease import tariff and the efforts to curb the petroleum prices at least until the end of June 2010. A92 petrol is now selling at 16,990 dong per litre.

According to the General Department of Customs, Vietnam imported 3493 thousands tonnes of petrol and oil products in the first four months of 2010, a decrease of 23.2 percent in comparison with the same period of the last year. Meanwhile, Vietnam exported nearly 2.9 million tonnes of crude oil, a decrease of 47.2 percent in comparison with the same period of the last year.

Steel prices to rise further in Q2

The recovery of the world’s economy and the scarcity of materials have increased the demand for steel, making the steel price increase by 50-100 percent in the first four months of the year.

Australia, the biggest iron ore provider in the world has announced the ore price increase by 40-50 percent compared to 2009, from $80 to $140-150 per tonne. Meanwhile, the price of coal imports has increased by 80 percent.

The domestic steel market also has been heating up. Steel producers raised the steel prices six times in March, and have raised the sale prices two times since the beginning of April.

Two reasons have been cited to explain the steel price increases. Firstly, the demand for steel has been increasing as the country has entered the highest construction season of the year. Secondly, the material prices in the world market have increased, thus leading to the higher production cost and higher sale price.

Currently, the prices of VNSteel’s products are between 13.77-13.87 million dong per tonne, an increase of 500,000 dong compared to late March.

Vietnam imported 2.55 million tonnes of steel worth $1.63 million in the first four months of the year.

Cement prices would not see sharp adjustments

Unlike steel, the cement price has increased only a little. The price has increased by five percent only so far this year, or 50-70,000 dong per tonne in comparison with March.

In the first quarter of 2010, the total cement output was estimated to reach 10 million tonnes, of which 3.4 million tonnes came from the Vietnam Cement Corporation. It is expected that the cement output will be 12.5 million tonnes in the second quarter of the year, when some new production lines will become operational.

According to MPI, the cement supply will exceed the demand by five million tonnes in 2010, even though the plants are still not running at full capacity. Moreover, as the 2009’s inventory level is big, the cement price will not see big adjustments in 2010.

In the north, cement is selling some 1.12 million dong per tonne.

Fertilizer prices to increase due to higher input costs

In April, Vietnam imported 180,000 tonnes of fertilizer, worth $55 million, down by 7.7 percent from March 2010.

This means that in the first four months of the year, Vietnam imported 1.123 million tonnes worth $348 million. Meanwhile, Vietnam has 85,000 tonnes of urea from domestic sources. As such, the total supply is expected to be profuse which will be more than enough for the summer-autumn crop.

However, the MPI still believes that the fertilizer price will increase due to the higher prices of petroleum, electricity and coal.

Thoi bao Kinh te Vietnam

Tags: Vietnam cement prices, Vietnam Petrol prices, Vietnam prices, Vietnam steel prices