Cement price up slightly due to hike in input costs

The slight increase in cement prices was due to increase in energy and shipping costs, which account for 80 percent of the cost of production of each bag of cement, industry data shows.

Energy includes cost of fuel, coal and electricity.

Based on the data, fuel prices have increased by 34 percent compared to last year. It will be noted that fuel directly affects variable cost and has a domino-effect on the cost of major inputs.

Electricity prices have continued to soar and remain among the highest in the world, while world coal prices have increased by 18 percent. Coal is the main combustible used in firing cement kilns.

On one hand, shipping costs have reached new highs, affected by fuel price increases, insurance cost increases and supply/demand imbalance. Shipping affects distribution costs and the cost in imported inputs such as combustibles, spare parts and other raw materials.

The depreciation of the peso has also affected the price of cement as it has increased the cost of dollar-denominated inputs.

Philippine cement prices remain among the lowest in the world and have one of the lowest percentage increases in price compared to other construction materials.