Three Major Cement Companies Agree to Apply Price Increase Starting January Next Year

A ready-mix concrete truck waiting for its turn at a construction site.
[Photo by Yonhap News]

[Asia Economy Reporter Kim Jong-hwa] The Emergency Countermeasures Committee (ECC) of the small and medium-sized ready-mixed concrete industry announced on the 19th that it has agreed with the three cement companies?Ssangyong C&E, Halla Cement, and Asia Cement?to postpone the timing of the cement price increase to January next year.

Accordingly, the ECC will defer the planned work stoppage starting from the 20th and will continue negotiations with the remaining cement companies, including Hanil, Sampyo, and Sungshin Cement, which have not agreed to the price increase in January next year.

Previously, Ssangyong C&E notified the ready-mixed concrete industry that it would raise cement prices by 15.4% starting in November due to increased manufacturing costs such as bituminous coal prices and electricity costs. Halla Cement and Asia Cement also notified price increases of 14.5% and 14.1%, respectively, starting in November for the same reasons.

The ECC strongly opposed the second attempt to raise cement prices this year following the first half and had threatened to halt operations if the price increase was not withdrawn. The ECC conducted two rounds of negotiations mediated by the Win-Win Growth Committee and the Korea Federation of SMEs but failed to narrow the differences. However, through relay negotiations with individual cement companies, it succeeded in reaching an agreement on the timing of the price increase with three companies: Ssangyong C&E, Asia Cement, and Halla Cement.

However, the remaining cement companies, including Hanil, Sampyo, and Sungshin Cement, have not backed down from the November price increase. A cement industry official stated, "Sales drop to about 10% of the usual level during the winter maintenance period until March next year," adding, "We cannot accept the ready-mixed concrete industry's demand for a January price increase." The November prices are paid around early January, so if the increase takes effect in January, the prices for sales reduced to one-tenth from January to March would be received between March and May. In this case, cement companies needing funds for winter maintenance would have to endure several months with almost no sales.

An ECC official said, "Given concerns about the spread of conflicts between ready-mixed concrete companies trading with these cement companies and confusion due to changes in the trading environment, we expect the remaining cement companies to make active negotiation efforts for mutual cooperation."

This content was produced with the assistance of AI translation services.