From the end of November 2020, the domestic construction steel price suddenly increased sharply, although the consumption decreased by about 10% compared to the previous month. According to estimates, in the period of December 2020, the steel price on the market is at 14.9 – 15.1 million VND / ton, equivalent to an increase of nearly 30% compared to the beginning of 2020.
The price increases suddenly, the supply is scarce
Domestic construction steel currently has an average price of about 14,900 – 15,100 VND / kg at the beginning of December 2020, depending on the brand and specific type. However, not only the price increases continuously, the suppler or steel distributors keep hoarding and waiting for high prices has caused many difficulties for construction companies, especially large orders from factory general contractors.
Steel billet price increased by 1.8-2 million VND / ton, respectively 13.4 to 13.6 million dong / ton. Scrap steel price also increased by about 1 million VND / ton, keeping the price at 8.4 – 8.6 million dong / ton. The supply of imported scrap steel price soared from 135 USD to 475 USD / ton, the imported billet price increased 90-95 USD / ton compared to the beginning of November 2020, currently fluctuating at 586-588 USD / ton. Experts say that the continuous increase in steel prices is due to trade tensions between Australia and China, as well as the trend of increasing trade protectionism and financial risks in the context of a gloomy global economy due to the COVID-19.
Steel industry movements as reported by SSI Research show that the steel price index has reached a record higher than the VN Index.
Rising steel prices are good news for steel manufacturers and distributors, but cause many difficulties for construction contractors. Continuously rising construction steel prices and shortage of supply make project schedule at risk of being delayed, construction costs increase unexpectedly, leading to a decrease in business efficiency of general construction contractors. As a general construction contractor often signed the Lump sum Turnkey contract with investors, DELCO also faces many difficulties due to the skyrocketing increase in construction steel prices. However, DELCO always tries to provide total solutions, detailed quality control in the construction process, in order to ensure the best cost optimization for the Investor.
Information source: Tuoi Tre, VTV Online Newspaper, VNEconomy