Cement prices stable due to enhanced capacity utilization, higher demand

Cement prices continued to maintain stable levels, despite onset of summer and peak construction activity largely due to enhanced capacity utilization and higher market demand resulting from import restrictions, Philippine Cement Manufacturers Corp.’s Felix Enrico R. Alfiler said.

Alfiler noted that in contrast to other construction materials which are import-dependent, such as paint and steel, cement prices have maintained reasonable increases. "This is due to the enhanced use of capacities of local cement plants made possible by the temporary import restrictions intended to block unfair trade.

Based on information submitted by local cement companies, capacity utilization of the industry continue to hover between 45 and 50 percent but the slight improvement of market demand had helped raise utilization levels.

Trade and Industry Secretary Manuel Roxas II this week cited government price monitoring reports which found average increase of cement prices at P3 per bag, from P95 to P98.

Independent DTI monitoring data on construction materials showed that latest data on cement prices was monitored to be P95/bag in NCR and Metro Manila on March 17, P90 / bag in Legaspi and P94/bag in Cabanatuan.

Alfiler said that areas affected adversely by geographical and transport disadvantage tend to have higher cement prices.

The Asian crisis forced the mothballing of new capacity on stream in 1997. As a result, the industry has been operating at 50 percent capacity for the last three years ending in 2002. However, the drop in imports in 2002 effectively made available new market shares for cement companies.

"Government’s recognition of the importance of having a stable and viable cement industry is now reaping its own rewards for consumers," Alfiler said.

He cited that industries which rely on imports are very vulnerable to wide price fluctuations. He cited that in the case of steel, increased demand from China has significantly pushed up prices of steel – the same goes for all other imported construction materials.

The DTI has identified construction materials as among its top 10 priority sector. The others are electronics, food, giftware – holiday decor, home furnishing, IT and IT-enabled services, marine products, motor vehicle parts and components, organic and natural products and wearables.

According to the DTI, among the advantages posed by the construction sector are: competitive price and quality, environment-friendly operations, customer-oriention, sales and delivery reliability, and post-sales service commitments.