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Building material prices ‘to remain stable'
Domestic demand for building materials will significantly increase this year thanks to the economy's recovery. However, industry insiders forecast, prices will not rise much due to an abundant supply of materials.
Although prices of locally-made steel has surged VND90,000-120,000 per tonne compared to last December due to an increase in input costs, fluctuations in foreign currency exchange rates and higher demand, it is forecast that prices will not increase any further because of competition from imported steel.
The wholesale price of steel range from VND11.7-11.74 million per tonne in the northern provinces, while the price in the south stands at VND11.52-12.12 million per tonne. The retail price in the north is VND2.8 million and VND13.2 million per tonne, while steel retails in the south for VND12.3-13.4 million per tonne.
According to the Viet Nam Steel Association (VSA), the steel sector will face difficulties this year due to an increase in input prices for iron ore, coal, oil, steel ingots and electricity.
VSA Chairman Pham Chi Cuong says that there will be no strong increase in steel prices as the country is not short of steel. Moreover, the price of imported steel from China, Russia and other Southeast Asian countries is currently lower than that of Viet Nam-made steel.
Cuong points out that there will be an abundant supply of steel on the domestic market and supply will probably exceed demand this year when a number of new steel production projects are put into operation. As a result, locally-made steel will have to sharpen its competitive edge to maintain its share of the home market.
The VSA has called for protective measures in line with the World Trade Organisation's rules to help local businesses compete against the strong penetration of imported products into Viet Nam that may threaten the employment of Vietnamese workers.
In addition, the VSA has also stressed the need to strictly manage newly-invested projects to create a balance between steel supply and demand on the domestic market.
Cement companies and joint ventures under the Viet Nam Steel Corporation have lifted their prices by VND25,000-41,000 per tonne since early last month, up 2.5-4.8 percent over last December as the 10 per cent value-added tax (VAT) has been reimposed as of January this year after it was halved last year.
At present, cement trades at VND858,000-VND1.12 million per tonne, including VAT. In northern provinces, cement stands at VND890,000-VND1.12 per tonne, while in the south, the figure is higher at VND1.1 million-1.4 million per tonne.
However, the price of cement is also anticipated to remain stable or marginally increase by some VND10,000-40,000 per tonne despite a possible increase in input costs, including coal, oil and electricity expenses, thanks to a glut in supply.
According to the Ministry of Construction, total demand for cement in the domestic market this year will reach 50-51 million tonnes, up about 13 percent over last year. However, it also predicts that supply will exceed demand by 5 million tonnes.
The ministry has so far asked the municipal and provincial People's Committees to stop approving new cement production projects. It has also requested the Viet Nam Cement Corporation and other cement producers to seek export markets to balance supply and demand.
vietnamnews
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