Large cement companies are preparing to increase cement prices again. On the 9th, Taiheiyo Cement announced a price increase starting from April 1, 2025, and on the 27th, UBE Mitsubishi Cement also announced a price adjustment for the same period. Sumitomo Osaka Cement also expressed recognition that further price increases were necessary. If all three companies follow through, this will be the third price increase after two price increases in 2022. Cement price increases are directly related to ready-mix concrete prices. It seems necessary to closely monitor future developments, including ready-mix concrete prices.
In the cement industry, coal prices increased due to supply chain disruptions following the coronavirus pandemic and the situation in Russia and Ukraine. As the yen continues to lose value, raw material and fuel prices remain high, and there are concerns about the impact of the "2024 problem" on the construction and logistics industries. Carbon neutral (CN) support is also required.
Taiheiyo Cement determined that it would be difficult to achieve that through self-help efforts such as improving productivity and reducing costs. It has been announced that the prices of various cement products (excluding white cement) will increase by more than 2,000 yen per ton starting April 1, 2025. UBE Mitsubishi Cement will also increase the price of cement and solidifying materials (all types of packaging) over 2,000 yen starting April 1.
Sumitomo Osaka Cement President Hironori Morohashi said at the financial results press conference for analysts and investors held in Tokyo on the 15th, ``Because the profit margin of the cement business bamboo shoots are extremely small, we will limit factors that increase costs. forward. We need the next new price increase." The timing and scope of the price increase are still being considered.
The three major cement companies have increased prices twice in 2022 by about 5,000 yen. These price increases have become widespread and business performance is on track to improve in the fiscal year ending March 2024. However, domestic demand remains sluggish and unpredictable.
A cement manufacturer said: “If an unforeseen situation occurs, coal prices will increase. Domestic demand could fall even further. Shoichi Saito, President of the National Federation of Ready-made Concrete Industry Associations and Cooperatives (Zenseiren), said in response to the trend of rising cement prices and increasing logistics costs, ``In general, we do not Is there any other choice but to increase cement prices? to move in the direction of further price adjustment.” “Probably not,” he said.
As Japan as a whole moves to increase wages and prices, the upward trend in construction material prices is likely to continue. However, if construction costs skyrocket, it could lead to a decline in the number of public construction projects and a decrease in demand for investment in private construction projects. At the same time as promoting appropriate price pass-through, it seems that the companies involved will need to make efforts to further reduce costs and increase added value.
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