Steel price rise 'unusual' amid plentiful supply: construction ministry

By Duc Minh May 13, 2021 | 08:47 pm PT

Steel products seen in a factory. Photo by VnExpress/Anh Minh.

Steel prices have surged by 40-50 percent this year though there is no shortage, the Ministry of Construction said, calling it "unusual."

There is supply of 14 million tons of steel, enough to meet domestic and export demand, it said in a statement.

Prices are usually determined by demand-supply but recent price surges have not followed that principle, it added.

Steel is an important construction material that typically accounts for 10-30 percent of a project’s cost. The surge in the price of steel and other materials has cut into the profits of contractors and threatens to send them out of business.

The ministry has called on province and city authorities to prevent speculation in steel and other construction materials. They could publish monthly reference rates to help businesses plan, it added.

The Vietnam Steel Association (VSA) had said in March that prices could rise by the end of the third quarter due to a shortage of raw steel in China and India, though not in Vietnam.

The pandemic has caused deliveries to be delayed which caused prices to rise, it added.

The Ministry of Industry and Trade said it would recommend that the government should temporarily limit the exports of steel products that are in high demand in the country to stabilize prices.

Steel production in the first quarter rose 34 percent year-on-year to 7.6 million tons, while exports rose 59.5 percent to 1.6 million tons, according to the VSA.