Dealer and construction owners struggle to cope as steel prices soar

Steel prices continue to rise

Since the beginning of the year, prices of goods have increased.construction materialsPrices across the country in general and Nghe An province in particular have fluctuated, in which construction steel is a material with continuous price increases.

Steel is the construction material with the strongest price increase since the beginning of the year. Photo: QA

Mr. Phan Than, owner of a construction materials store in Dien Nguyen commune, Dien Chau district, said: Since the beginning of the year, steel prices have increased four times, reaching over 17 million VND/ton. This is one of the times when construction steel prices have increased the most in the past 10 years.

In Vinh City, according to a reporter's survey, on the streets with many construction material stores such as Nguyen Sy Sach, Le Nin Avenue, Nguyen Phong Sac, Phan Boi Chau... steel prices are also very high, fluctuating at 17.2 - 17.6 million VND/ton depending on the type of steel coils and steel bars when imported to agents.

Mr. Nguyen Van Son, owner of a construction materials store in Vinh City, said: At the end of 2022, the price of imported steel was around 16.4 million VND/ton, after that, the factory continuously updated new prices, each time increasing from 200,000 - 300,000 VND/ton. Up to now, the increase has reached over 1 million VND/ton.

After 4 price increases, the current price of imported steel at dealers is over 17 million VND/ton. Photo: QA

According to construction material dealers, the main reason for the high steel price increase is that the price of steel billets and the prices of input materials for steel production such as coal, iron ore, scrap steel, hot rolled coils... have not shown any signs of stopping the increase, so finished steel products are forced to increase prices to compensate for production costs as well as reduce losses.

Although the current increase has not reached the record level as in May 2022 (nearly 20 million VND/ton), with the continuous increase since the beginning of the year, it is unlikely that the steel market will "cool down" in the near future.

Steel is a construction material that accounts for a large proportion of construction projects. Photo: QA

Dealers and contractors struggle to make ends meet

The high price of steel has made dealers, contractors of large and small projects and people all feel restless for different reasons. For construction material dealers, the high price of steel while the demand for construction steel is decreasing sharply, the large amount of steel in stock makes many people worried.

Many construction material stores are extremely worried when imported steel prices are high but they cannot be sold. Photo: QA

In the first days of April, the number of customers at Sy Luong Construction Materials Facility, Hung Dung Ward, Vinh City could be counted on one hand. Ms. Luong, the owner of the facility, had to make frequent phone calls to construction sites and contacts to find out the demand for materials, but the situation was still not optimistic. Ms. Luong shared: “Normally, from the second lunar month is the time when construction projects are continuously started due to favorable weather. In previous years, trucks carrying raw materials were constantly coming in and out of the store, but this year they are completely absent. The amount of inventory, especially our construction steel, is still dozens of tons in the warehouse, and consumption is very slow despite being imported at high prices. And every day that goods are consumed slowly means a loss…”.

Many housing and outbuilding projects have seen their prices inflated as steel prices increase. Photo: QA

According to Ms. Luong, there are many reasons why the demand for construction materials is currently decreasing sharply, mainly due to the economic difficulties after the pandemic, the real estate market has slowed down, the demand for construction projects is very low, leading to a record decrease in the consumption of construction materials. Due to having imported a large amount of goods, the dealers are now sitting on hot coals, when customers come to buy goods and receive notifications of new steel prices, many people have left...

For people, especially those who have started building houses and ancillary works, the high price of steel has also increased the cost compared to the initial estimate. In early March 2023, Mr. Ngo Trung Khang's family in Dien Chau district decided to break ground on a 3-storey house with an area of ​​over 100m2. According to initial calculations, the price of steel will account for 15-20% of the total cost of the house. However, when the foundation was just completed, the price of steel at local construction material stores increased to over 1 million VND/ton, forcing the family to recalculate and balance the cost.

Construction of the North-South Expressway, Dien Chau - Bai Vot section. Illustration photo: QA

Mr. Khang shared: “My project is expected to use over 30 tons of steel. If I had known about the increase in steel prices and proactively placed an order during the last Tet holiday, I could have saved tens of millions of dong. Now the house is under construction and cannot be abandoned. I have no choice but to accept the increased cost, there is no other way…”.

In fact, not only Mr. Khang's family but also many households planning to build houses are delaying construction to wait for the price of construction materials, especially steel, to stabilize before implementing.

For key projects in the province, especially those related to bridge and road construction, the high price of construction steel also causes costs to increase significantly.

Mr. Nguyen Manh Hung - Director of Than Vu Tunnel Management Board, CIENCO4 Group said: Currently, on the North-South Expressway section through Dien Chau, we are constructing 2.2km of road and 567m of Than Vu tunnel left branch at Cua Bac; in Hung Nguyen district, there are 4.1km of road and 1.5km of bridge including 5 bridges: Hung Thang 1, Hung Thang 2, Hung Thang 3, Provincial Road 542C bridge and Hung Duc bridge with a large amount of construction steel. Since the beginning of the year, the high price of steel has also caused the cost to increase, but once the project has been contracted, the construction must continue. If the construction stops, it will affect the progress of the national key project, and we will be fined or even not be paid for the completed volume...

Workers construct bridge piers on the North-South Expressway. Photo: QA

On the Vinh - Cua Lo Highway Phase 2, vehicles and machinery are also being mobilized, taking advantage of favorable weather to ensure construction progress. Engineer Cao Xuan Vinh - Project Manager, Tan Nam Construction Joint Stock Company said: We are in charge of constructing 70% of the package volume, the largest on the route, so the price of construction materials also has a significant impact on the construction of the project. Since the beginning of the year, the cost of construction materials such as steel, sand, and stone have all increased, especially steel, causing costs to increase by 5 - 10% compared to the original estimate. The most important goal is still to ensure progress, so the import of construction materials must still be carried out continuously despite high prices.

“However, we also hope that raw material suppliers will promptly notify us of price fluctuations so that we can take timely measures. Construction steel prices account for a large proportion of the cost of road and bridge construction projects, so we also hope that departments and branches will strengthen price management and remove obstacles to ensure the construction of key projects,” emphasized engineer Vinh.

Quang An