(Construction) - Recently, the Ministry of Construction has submitted an opinion to the Ministry of Finance on the information and assessment of the construction materials market situation in the fourth quarter and the whole year 2022.
Prices of construction sand and stone materials are forecasted to increase when key national projects are implemented (Artwork).
According to statistics of the Ministry of Construction, in the first half of 2022, steel prices continuously increased, even in the first 6 months of the year, the adjustment increased 7 times. In particular, in March 2022 alone, steel prices increased by 6 times (beyond the level of 19 million VND/ton and increased by about 2.4 million VND/ton compared to the end of 2021).
However, in the next 2 months, steel price adjusted down 7 times in a row, pulling steel price back to the level in the last months of 2021 (at this time the average price was about 17,000 VND/kg excluding VAT). In the months of July and August, steel price continued to decrease to 14,500 VND/kg, another 15% decrease compared to the lowest level of May 2022.
Explaining the continuous decrease in steel prices, the Ministry of Construction said that due to the sharp drop in input material prices, along with abundant supply and large inventories, businesses had to lower product prices to stimulate market demand. .
Still following the downward trend, by October 2022, the situation of steel production and consumption continued to decrease by 16.38% and 29.4% over the same period, respectively. During this period, steel production materials such as iron ore, hot rolled coil (HCR), and imported steel scrap dropped sharply, so a deep drop in domestic steel prices was inevitable.
Up to the present time, steel price has remained stable compared to October 2022 (average in the range of 14,400 VND/kg-15,500 VND/kg depending on the region).
Steel prices remained stable due to relatively high inventories and reduced demand due to the weakening of the domestic and regional construction and real estate markets. In the near future, the "reducing demand" is the main factor that makes steel prices may continue to fall deeper.
In addition to the volatile steel market, from March 2022 to October 2022, the price of cement remained basically stable at around 1,200-2,900 VND/kg, an increase of about 15% compared to the fourth quarter/kg. 2021 and an increase of about 18% compared to the fourth quarter of 2020. Cement prices tend to increase by an average of 1.45% monthly.
According to the Ministry of Construction, from November 2022 to now, cement prices continue to climb at about 1,400-2,500 VND/kg, due to raw material prices and high input costs (especially coal prices) forcing businesses to must increase the selling price.
However, the rate of domestic cement consumption and cement export is slow and weakened, in contrast to the selling price, leading to an oversupply situation that causes difficulties for businesses in the Cement industry.
As for asphalt materials, as of July 2022, the average price remained at about 17,000 VND/kg (an increase of about 15% compared to the fourth quarter of 2021 and an increase of about 30% compared to the fourth quarter of 2020). By September 2022, the price of asphalt has decreased by about 500 VND/kg, bringing the average price to about 16,500 VND/kg. In the last months of this year, asphalt price kept stable at this level.
Many experts believe that the increase in the price of asphalt compared to previous years is due to the influence of the increase in gasoline prices in the world. The increase in the price of asphalt has a significant impact on the construction cost estimate. Especially for traffic works, this is an important material for the production of asphalt concrete - a task with a large cost, accounting for a high proportion of the total construction cost.
According to the Department of Construction Economics (Ministry of Construction), the price of naturally exploited materials (such as sand, stone) used for leveling in projects also increased slightly. In the first half of 2022, the price of construction sand across the country tends to increase but there is no abnormal fluctuation. The average increase was recorded at the rate of 1.53% quarterly; For the special type of golden sand used to pour concrete, the market price ranges from 420,000 to 460,000 VND/m3.
The high price of yellow sand and no sign of decreasing is mainly due to the scarcity of supply, the scarcity of sand not only occurs in Vietnam but also in many other countries.
In the second half of 2022, sand prices will increase slightly (an increase of 1-2%) due to market demand, averaging from 435,000 to 465,000 VND/m3. Thus, it can be seen that the sand price in 2022 is basically stable, without any unusual developments.
Construction stones are relatively stable, in the second half of 2022, prices in the North and Central regions tend to increase compared to the first half of 2022 (up about 7-8%); Only the South recorded a decrease compared to the first half of 2022 (a decrease of about 2-3%).
It is forecasted that in the first quarter of 2023, steel prices are likely to continue to decline slightly due to a decrease in market demand. Other construction materials will increase slightly when important national projects start on a large scale.
In the coming time, the Ministry of Construction will continue to coordinate with relevant ministries and sectors to organize the implementation of measures to control and manage the building materials market. Actively closely monitor market movements, strengthen local control in announcing construction material prices.
