It is stated that steel prices have increased by 40-60% in the last 5-6 months and the sector is facing a crisis.
In particular, the prices of round steel used in reinforced concrete construction rose from 13 million VND (511 USD) per ton at the end of 2020 to 18.5 million VND (727 USD) last week and 19 million VND (747 USD) at the beginning of this week.
The effects of this price increase on the construction industry are devastating. Many contractors are experiencing huge losses on previously signed contracts. They are hesitant to bid on new projects because they know that if they bid high they will lose, and if they bid low they will not be able to cover the costs. Steel suppliers also require deposits before confirming orders because they do not know when prices will increase.
While construction costs increased by 15-20%, factory costs increased even more. If a project received an offer of 100 billion, it now needs to increase to 130 billion in order to be accepted. In the construction industry, the profit margin of medium-sized contractors is around 5-6%, which affected them much more than price increases. With the recent increase in prices, many construction companies are entering crisis or even going bankrupt.
Construction contractors are requesting support from investors during this difficult period. However, no development or solution proposal has been offered yet on this issue.
The increase in steel and construction materials prices creates a crisis that deeply shakes the Vietnamese construction industry. Urgent steps are expected from both the government and relevant institutions to overcome this crisis.
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