Korea Cement Association to Announce Official Position on the 5th
Completion of Environmental Investment and Conversion of Export Volume to Domestic Sales
"Artificial Production Control? Premature Suspicion"
As the cement crisis triggered an emergency at construction sites, the cement industry announced that it would "actively cooperate with the government's supply stabilization measures." It denied claims that some ready-mixed concrete (remicon) companies were offered to purchase cement at a premium.
The Korea Cement Association stated on the 5th in an official position, "Unexpected increased demand at construction sites has led to a shortage of remicon supply and even operational disruptions at some construction sites," adding, "We will do our best to resolve supply instability."
They explained that the cause of the current cement crisis lies not in production issues but in increased demand. Cement production from January to March this year rose by 3.6% (370,000 tons) compared to the same period last year, while demand increased by 8% (790,000 tons) over the same period.
The reasons for the increased cement demand include ▲expanded construction starts due to mild weather ▲increased carryover volume following the Cargo Solidarity transport refusal incident ▲expanded cement input volume due to strengthened quality control standards for remicon.
To reduce cement supply instability, the industry plans to complete most of the regular maintenance of production facilities within this month or postpone it to the second half of the year. Export volumes contracted with overseas demand sources (over 250,000 tons) will be prioritized for domestic supply. Additionally, ongoing environmental investments are expected to be completed on schedule, leading to further increases in cement production soon.
However, some claim that the emergency situation at construction sites caused by delays or stoppages in remicon supply is due to "artificial production adjustments by the cement industry."
In response, the Cement Association criticized, "Premature suspicion will only deepen misunderstandings and distrust among industries rather than resolve the situation," calling it "a very regrettable behavior that hinders the coexistence of the cement, remicon, and construction industries."
They also denied claims that some remicon companies were offered to purchase cement at a premium from the cement industry.
The association explained, "Remicon companies typically request various discount rates considering their trading relationships when purchasing cement, and the cement industry supplies cement reflecting these conditions."
They added, "In the process of requesting new transactions for additional supply from new cement companies, remicon companies voluntarily proposed receiving supply under less favorable conditions (such as reduced discount rates) than existing clients, then externally expressed it as if they were asked for a premium by the cement companies."
Finally, the association stated, "We will do our best to ensure timely production and supply of products to quickly resolve operational disruptions at construction sites," and "In cooperation with relevant ministries such as the Ministry of Trade, Industry and Energy and the Ministry of Land, Infrastructure and Transport, we will do our utmost for mutual development through supply situation monitoring and additional market stabilization measures."
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