Construction material prices forecast to increase sharply in Q3

Thursday, Aug 31, 2023 10:11


The demand for construction stone is forecasted to increase. — Photo

The Ministry of Construction forecasts that the demand for construction soil, stone and sand will increase significantly in the third quarter of 2023. The price of these construction materials is also predicted to rise, causing difficulties for investors, construction units and local authorities.

Online newspaper VietnamPlus spoke to Đặng Hoài Nam, an official from the Construction Economics Department under the Ministry of Construction on this prediction and plans to control construction material prices.

Could you tell us about the market situation of building materials, especially the price of sand, construction stone, cement, steel and asphalt?

Based on fluctuations in the construction material market in the first half of this year, the Ministry of Construction forecasts that the price of construction sand and stone in the third quarter of 2023 will continue to increase when major traffic projects have started simultaneously across the country from the beginning of the year.

Among them were 10 sub-projects of the East North-South Expressway in the 2021-25 period; Belt Road No 4 in Hà Nội; Belt Road No 3 in HCM City; Biên Hòa-Vũng Tàu Expressway and Châu Đốc - Cần Thơ - Sóc Trăng Expressway.

These projects causes the demand for construction soil, stone and sand to increase dramatically, causing difficulties for investors, construction units and local authorities. In particular, three areas that will see great demand for construction materials are Hà Nội, HCM City and the Mekong Delta provinces.

In terms of construction materials such as cement, construction steel and asphalt, the Ministry of Construction foresees that their prices will remain stable or decrease slightly in Q3 due to the abundant supply for construction and exports.

Could you provide more information and the data served as the basis for the forecast on the sudden price hike of construction materials, especially stone and construction sand?

The above forecast is based on data, assessment of the market for materials, labour or development of construction projects, that were researched by the ministry's Institute of Construction Economics. This information is gathered into reports and forecasts of market fluctuations, then converted into executive reports of the Ministry of Construction to send to the Prime Minister and all levels, ministries and branches to grasp the situation.

For example, the price of steel is usually related to steel ore, oil and coal. Therefore, in case the price of steel rises, of course, the price of related items will also increase.

Another source that can be used is domestic consumption, such as how construction materials are consumed and how inventory is maintained. If enterprises can not sell steel and cement, will the price increase? Or like cement, with high prices of input sources, but the goods cannot be sold, businesses cannot reduce or increase product prices but have to fix at an appropriate price.

As you mentioned above, the investors and construction developers of traffic projects will face difficulties due to the sudden increase in demand for construction soil, stone and sand. Can it be understood that there will be a shortage in the supply of fill soil, stone, and construction sand?

The scarce supply of mining construction materials such as soil, stone and sand in localities where traffic projects have been developed is foreseeable.

In terms of procedures, although some mines have been licensed, it is a process to put the mines into exploitation and official operation, and involves many other factors, such as investment and compensation for site clearance.

Therefore, there will likely be a shortage in the supply of building materials, especially sand and stone, for construction. This is also the reason why the cost of construction materials is expected to increase.

How will the increasing price of construction materials in Q3 affect the real estate market, especially the implementation of social housing projects across the country?

Of course, when the price of construction materials increases, the real estate market will also be affected. When the price of input materials rises, the selling price of real estate products will also be pushed up, making it difficult for homebuyers.

From a personal perspective, I see that the real estate market is slowing down. Therefore, in general, there is still no positive signal.

Will the Ministry of Construction draw up measures to control the market of building materials and ensure the sustainable development of building materials and real estate markets in the future?

The Ministry of Construction will collect information and update the problems of localities related to construction material prices and then guide and urge these localities in announcing prices of construction materials, construction cost and price indexes to ensure the correct frequency, time and uniformity throughout the country.

Along with that, the ministry will also monitor construction prices, real estate and urban services to collect and report on the price movement of construction materials, selling prices, rental prices and rent-purchase prices for social housing.

The ministry also assesses and forecasts the real estate market and plans to check and work with localities where key projects such as the North-South Highway and airpoót are being deployed to have a solution to deal with the shortage of building materials for projects. — VNS

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