Importers see continuous inflow of cement despite DTI’s additional duties

    152

    Despite the imposition of additional duty on cement, imports will continue to come until such time that local plants could produce more, importers said.

    Napoleon Co, an importer and trader of construction materials, doubted the local cement producers’ ability to immediately ramp up production even as he warned of possible price increases.

    The Department of Trade and Industry (DTI) has ordered a definitive safeguard on cement for a period of three years: P10 per bag on the first year, P9 on the second and P8 on the third.

    “If local plants will not increase their prices, if there will be demand, then imports will continue to come in. Consumers will, however, pay for the safeguard duty..let’s watch out,”  Co said in an email.

    “Unless local cement plants can supply demand, imports will be brought in by traders and by local plants themselves in the form of clinker to fill the gap,” Co added.

    He said  2018 demand stood at 34 million metric tons (mt) but local plants produced only around 28 million mt .

    “The rest had to be imported by local plants and traders not due to any price competition but because local plants cannot meet demand. However local plants were forced to adjust their prices to near import parity, resulting to less profits,” Co added.

    He said even with safeguards of P10 per bag, imports by local plants will be competitive if they subsidize the shipping costs.

    Co said construction will continue to fuel demand especially from the infrastructure projects of the government.