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Thursday, June 13, 2024

Many projects on verge of lagging behind schedule as steel prices surge

The Saigon Times

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HCMC – Since early March, domestic steel prices have increased three times by an average of VND600,000-1.4 million per ton, worrying many contractors and slowing down the execution of many projects.

The price of Hoa Phat’s D10 CB300 steel has risen from VND17.12 million to VND18.43 million per ton, Tuoi Tre Online newspaper reported.

Vietnam-Italy Steel JSC’s D10 CB300 steel has also been revised up from VND17.07 million to VND18.38 million per ton.

Southern Steel Co., Ltd’s rolled steel price has picked up from VND17.26 million to VND18.57 million, while its D10 CB300 steel price has risen from VND17.46 million to VND18.78 million.

Moreover, Pomina’s D10 CB300 product has been priced at VND18.17 million, instead of VND17.76 million per ton.

Nguyen Quoc Hiep, chairman of the Association of Construction Contractors (VACC), said the prices of steel, cement and many other building materials had increased, and while the association had repeatedly reported the issue to ministries, agencies and the Government, effective solutions had yet to be worked out.

The steel cost makes up a large proportion of the value of projects. Without solutions, many projects may face a suspension, Hiep noted.

According to VACC, the steel cost accounts for some 18%-20% of the value of high-rise apartment building projects. The proportion is higher in road and bridge projects.

Obviously, the steel prices affect the value of construction projects. The construction sector currently contributes some 8%-9% to the country’s gross domestic product (GDP).

If the sector is affected, the country’s GDP target will be hard to achieve, Hiep said.

Most contractors have been in a dilemma. If they continue executing projects, they will face losses. Otherwise, they will be fined if they fail to ensure the progress of the projects and may not receive payments for the completed workload.

VACC has proposed the Ministry of Construction review and publicize the prices of building materials in regions.

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