High prices slow building market

Increased prices have had a tremendous effect on the domestic building material market, according to trade insiders.

“The market is as quiet as a graveyard,” Nguyen Thi Yen, director of the Hoang Yen Company Ltd in the northern mountainous province of Lai Chau said.

“No one is buying anything. We’re sitting around waiting for the whole day without selling anything. Customers just come, ask about the price and then leave,” Yen said explaining that many contractors have suspended their work.

“They have to reassess their costs because no-one wants to face losses,” Yen said.

Yen also affirmed that the situation was not unique to Lai Chau but could be seen across provinces throughout the country.

“I’ve just visited Ha Noi and found that the situation there isn’t any better,” she said.

Traditionally, demand for building material has never been high at the beginning of a year. This year, however, the situation was worse, said owner of Binh Bang building material shop on Hoang Quoc Viet Street in Ha Noi.

The trader said that at the moment, the price of most building materials, such as bricks, sand, steel and cement had increased by 5 per cent.

The Viet Nam Cement Association announced that in the first two months of this year, only 6.2 million tonnes of cement had been sold.

The association’s chairman Nguyen Van Diep said that for the country to meet the target of consuming around 55 million tonnes of cement this year, 8 million tonnes would have to be sold in the first two months of the year.

Diep also said after price increases in petrol and power, most companies were still taking into account the effects, and were considering new pricing.

Since the beginning of February, however, some cement companies have increased prices by about 6 per cent to between VND900,000 (US$42) and VND1.36 million ($65) per tonne.

Diep affirmed that cement prices were certain to rise in the near future.

Like cement, building glass prices have also risen by 15-17 per cent.

Due to the increase in petrol and power prices, construction glass prices rose from the first days of this month, said chairman of the Viet Nam Glass Association Tran Quang Thai.

Thai added that due to this increase, purchases had sharply dropped.

Since the beginning of March, steel companies also announced a surge, with prices up by VND500,000 ($24) per tonne.

Steel prices now stand at VND17 million ($810) to VND18.5 ($880) million a tonne. — VNS

Tags: Vietnam Construction, Vietnam construction material industry