September Cement Prices Rise in Earnest... Negotiation Sparks Still Remain

Adjustment Possible for Timing and Rate of Increase
Industry-Specific Meetings Held Under Government Supervision

Hanil Cement and Hanil Hyundai Cement raised cement prices starting from the 1st. The price of Portland cement, the most commonly used type, increased by 12.8%, from 105,000 KRW per ton to 118,400 KRW per ton. Sampyo Cement also raised its cement price from the previous 105,000 KRW per ton to 118,600 KRW per ton for shipments starting on the same day, a 13% increase.

A cement factory located on the outskirts of Seoul. Photo by Dongju Yoon doso7@

Halla Cement also set its cement price at 118,400 KRW per ton from October 1, marking a 12.8% increase from before. Considering Ssangyong C&E and Sungshin Cement, which had already raised their cement prices by about 14% to 119,600?120,000 KRW per ton from shipments in July, the cement industry has officially implemented a price hike. The cement industry cites increases in raw material costs, electricity fees, and investments in environmental facilities as reasons for the price increases.

There is still a possibility of adjusting the rate or timing of the price hikes. Since the cement industry mainly conducts business-to-business (B2B) transactions, it may reach amicable agreements with the ready-mix concrete industry and others. A cement industry official stated, "Considering long-term cooperative relationships, there is still a possibility to postpone the timing of the increase or adjust the rate," adding, "In the past, although cement prices were raised, after discussions with related industries, the timing was delayed by a few months or the rate was adjusted by a few percent." The nature of the cement industry, where tax invoices are issued about a month later and payment is received 2?3 months after sales, also contributes to the possibility of price readjustments.

The government has also stepped in to mediate by holding meetings to review cement supply and prices, requesting smooth price negotiations. The Ministry of Land, Infrastructure and Transport and the Ministry of Trade, Industry and Energy have arranged meetings where the cement, ready-mix concrete, and construction industries can continue discussions. The fourth meeting was held the day before, and the fifth meeting is scheduled for next week. A Ministry of Trade, Industry and Energy official said, "It is difficult for the industries to meet on their own, so the Ministry of Land, Infrastructure and Transport hosted the meeting," adding, "Until the day before, it was mainly about each industry's position, so we need to observe further developments."

The ready-mix concrete industry is hoping for a smooth agreement. When cement prices rise, ready-mix concrete prices must also increase, which inevitably leads to conflicts with construction companies. Bae Jo-ung, chairman of the Korea Ready-Mix Concrete Industry Cooperative Federation, said, "Cement prices have risen three times in the past two years, and including this time, it is the fourth increase since 2021. Additionally, prices of other materials such as sand and gravel have also risen, putting the ready-mix concrete industry in a difficult situation," adding, "Whether through government-led meetings or a delivery price linkage system, improvement measures are necessary." The delivery price linkage system is a mechanism that reflects changes in raw material prices in the delivery price.

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