Nghe An: Steel prices continue to increase, contractors and people are in trouble

Steel prices continue to rise

According to the price list of many steel distributors in Vinh City, since the end of 2020 until now, on average, steel factories have announced an increase in steel prices 2-3 times per month. Comparing the price list of a steel distributor on Lenin Avenue (Vinh City), the most recent on May 12, 2021 with December 2020, it shows that the price of steel with diameter 10 increased by more than 40,000 VND/bar, from 83,500 VND/bar to 124,000 VND/bar; steel with diameter 25 increased from 569,000 VND/bar to 843,000 VND/bar, an increase of more than 270,000 VND/bar. Depending on the brand, steel prices have different differences, but basically steel prices have increased.

According to steel business owners, thesteel prices riseThis is because factories depend on steel billets from abroad. In the context of high steel billet prices, combined with the prolonged Covid-19 pandemic, input prices have all increased.

Since the end of 2020, steel prices have continuously increased. Photo: Tien Dong

The high price of steel has not only caused many large investors and construction contractors to "go bankrupt", but also caused headaches for households when building houses in calculating costs. Many families who started building houses at the end of 2020 were forced to "bite the bullet" and buy steel at high prices to complete the project; some families who want to build houses this year are also carefully considering whether to invest or stop and wait for steel prices to drop.

Mr. Tran Dinh Huan (residing in Hung Loc commune, Vinh city), said: His family's plan is to start building a house this year, the design drawings are already available, but due to the price of steel as well as theconstruction materialsBecause the price of other houses kept increasing, he had to put aside the idea of ​​building a house and wait until the price stabilized before implementing it.

According to distributors' quotes, from December 2020 to May 2021, each 10mm diameter steel bar increased by more than 40,000 VND. Photo: Tien Dong

Currently in Nghe An, factories all provide agents with a common price to ensure healthy competition and prevent market dumping. Steel prices in Vinh City and mountainous districts are the same, only differing in discount rates and transportation costs.

Many investors and contractors suffer

Mr. Ngo Quang Trung - Director of a company specializing in consulting on civil and industrial construction in Vinh City said that for normal housing structures, 100m²The floor requires about 1.5 tons of various types of steel. For high-rise apartments or buildings with bored foundation structures, the amount of steel must be more, about 2.5 to 3 tons/100m²floor. And with steel prices increasing by 5-6 million VND/ton since the end of 2020 until now, many projects will have a huge capital increase. Especially for high-rise buildings with a floor area of ​​1,000m2²Steel prices have increased by hundreds of millions of dong - Mr. Trung emphasized.

According to Mr. Trung, the continuous increase in steel prices will put contractors who receive the entire package and hand over the project in a “turnkey” manner at a disadvantage because the time from signing the contract to handover is a long time, and prices fluctuate a lot. If the investor sympathizes and adjusts the price to increase according to the price of materials, it will be better, otherwise the contractor will suffer.

The current skyrocketing steel prices will cause each family to spend hundreds of millions of dong when building a house. Photo: Tien Dong

According to the announcement of construction material prices in the first quarter of 2021 by the Nghe An Department of Finance and Construction on April 1, 2021, steel prices range from 14,000 VND to more than 15,000 VND/kg. Accordingly, a steel bar of diameter 10 (11.7m long) costs more than 108,000 VND, cheaper than the price announced by material suppliers by more than 10,000 VND/bar.

However, in reality, for civil construction projects or private projects, it is very difficult to apply the price as set by the State.

Explaining why the announced steel price is cheaper than the steel price offered by suppliers, representatives of some material suppliers said that this is the retail price applied to customers buying in small quantities, and that price only applies to projects invested by the State.

For large projects, high steel prices can cause the project to cost billions of dong more. Photo: Tien Dong

Mr. Tran Viet Dung - Deputy Director of Nghe An Department of Finance said: According to the Government's regulations on construction investment cost management, every quarter, the Department of Finance and the Department of Construction will base on fluctuations in construction material prices in the province to announce construction material prices every quarter. The announced construction material prices will be the basis for investors to refer to, decide on the application or use to prepare and adjust construction estimates for works using State capital according to the unit prices prescribed by the Provincial People's Committee./.