Rising Steel Prices Hit Highway Construction Projects in Vietnam
VNS reported that the fourth wave of COVID-19 cases, coupled with the recent rise in prices of building materials, has forced many projects in Vietnam to halt construction or even fall into stagnation, which would affect the disbursement of public investment this year. VNS reported “From the beginning of this year, steel prices jumped by 40%, significantly pushing up investment capital, in some cases by billions Vietnamese dong for each project. This put construction enterprises into difficulties. Some have been forced to halt construction to avoid further losses.”
A representative from a contractor working on the Cam Lam Vinh Hao expressway project said that the increase in steel price pushed up the project’s investment capital by around VND150 billion. Other component projects like the North-South Expressway projects also faced the same issues. 319 Corporation, which is building 3 National Highways, said that skyrocketing building material prices put contractors into difficulty and created the risk that projects would fail to follow their planned schedules.
According to the General Statistics Office, the price index of steel and iron product increased by nearly 20% in April over the same period last year and more than 23% in the first four months of 2021. GSO pointed out three reasons for the increase, including rise in prices of raw materials for steel production and transportation costs, decrease of global steel supplies as China tightened control over production volume, together with rising domestic demand.