Soaring steel price torments construction firms

Steel accounts for about 20-30% of the cost of building apartments and houses. Photo by The Investor/Minh Anh.
Steel prices, which have surged 20-35% against last year, have rattled construction contractors and real estate developers.
The construction project of Hanoi-based Agricultural Construction Company (Vinacco) in the Mekong Delta province of Lam Dong is suffering losses due to soaring steel prices.
To make it worse, suppliers are reluctant to sign long-term supply contracts, selling only at their stores based on daily market prices. That means sourcing steel is Vinacco’s second headache.
“They even hoard steel on anticipation the price will keep rising day after day,” Do Van Ngoc, chief supervisor of the project.
Construction contractors suffer
Nguyen Binh, Director of the Ho Chi Minh City-based Dai Nghia Construction Company, said steel prices on the market have climbed 20-35% against 2021.
The price of D6, D8 steel coils from brands such as Hoa Phat, Pomina, Viet Nhat, Viet Duc and Viet Italy has soared from around VND17 million ($743) per ton at the end of 2021 to VND20.3 million ($875), excluding VAT.
Prices of other building materials like cement, bricks and sand have also risen 10-30% due to higher freight rates.
Steel accounts for about 20-30% of the cost of building apartments and houses, according to Binh. Therefore, the higher steel price will push the construction cost up by around 15%.
“As a construction contractor, our company will have to reconsider the contracts signed. However, not all investors would agree to revise signed contracts.”
Binh said his company has accepted that all their under-construction projects would make no profit. They have temporarily halted two projects and rejected new ones to limit the degree of damage.
Apartment price likely higher
As calculated by contractors, for a construction contract worth VND100 billion ($4.37 million), building materials account for 60-70%. With such soared steel prices, building costs could rise by more than 10%.
This means the price of an apartment could climb from VND30 milion per square meter to VND35 million ($1,530). It would be consumers who suffer if the developer passes on the additional cost to them.
Ngo Quang Phuc, General Director of Phu Dong Real Estate Group JSC, said the price of apartments is already pretty high, while supply is quite limited as legal entanglements prevent new projects.
“Real estate businesses have factored the increased material costs in their price. It is expected that the housing market would see a new price level by the end of the year.”
Tran Duc Vinh, CEO of Tran Anh Real Estate Group, said his company is adjusting its prices based on additional costs, but that means they would have more difficulties in selling their products.
Tran Anh is selling properties at three projects in Long An, Ba Ria-Vung Tau and An Giang provinces.
Vinh said he expects the steel price would continue rising until the end of the year. “Moreover, some major national infrastructure projects such as the North-South Expressway and Long Thanh International Airport, and the real estate market’s recovery will increase steel demand by 5-10% this year.”
Suppliers also in “hot water”
Vo Thi Hoai, Director of Binh Tan Building Materials JSC, said her company and other suppliers of building materials are also facing many challenges to assure supplies for partners.
“To keep clients, we are compelled to have a large number of support measures and aggressively seek for new sources to offset the shortage, leading to rising costs. Also, a spike in gas and oil prices raises the expense of transporting goods, which we must absorb, reducing our profitability.”
Le Quang Canh, Director of Trung Viet Machining Machinery Company in Ho Chi Minh City, said many producers using steel as inputs are losing money as they signed supply contracts when the steel price had not risen.
“We are suffering a huge loss in manufacturing mechanical products. We even don’t dare to sign new contracts for fear of incurring losses due to high iron and steel costs,” he added.
Vinh, CEO of Tran Anh Real Estate Group, proposed that state authorities take measures to stabilise the steel price so as the market could develop sustainably and the price of housing would not keep chasing after that of construction materials as is the case.
- Read More
Deputy PM requests strong reforms of state-owned enterprises
Deputy Prime Minister Nguyen Chi Dung has asked for bold and strategic reforms to unlock the full potential of state-owned enterprises (SOEs), requesting a clear shift in mindset and approach to governance, investment and development.
Companies - Tue, June 17, 2025 | 11:44 pm GMT+7
Petrovietnam subsidiary PTSC hands over 33 offshore wind power foundations to Danish giant Orsted
The recent handover of 33 foundations manufactured by Petrovietnam Technical Services Corporation (PTSC) to an offshore wind power project of Orsted has been recognized as an outstanding work of state-owned Petrovietnam.
Companies - Tue, June 17, 2025 | 11:35 pm GMT+7
Energy Asia 2025 kicks off in Malaysia
Energy Asia 2025 - a premier thought leadership and business advocacy forum, championing Asia’s pivotal role in the global energy transition - kicked off in Kuala Lumpur, Malaysia, on Monday.
Southeast Asia - Tue, June 17, 2025 | 11:29 pm GMT+7
Indonesia to start operating first ocean power plant in 2028
Indonesia’s Energy and Mineral Resources Ministry has announced that construction of the country's first ocean power plant will begin soon, with operations targeted to start in 2028.
Southeast Asia - Tue, June 17, 2025 | 11:27 pm GMT+7
Provincial police chief appointed chairman of Vietnam's telecom giant MobiFone
The Ministry of Public Security has appointed Major General Truong Son Lam, director of Ben Tre province's Police Department, as chairman of MobiFone's board of members.
Economy - Tue, June 17, 2025 | 10:14 pm GMT+7
Trump family to receive $5 mln in license fees for mega golf course development in Vietnam
The Trump family business is set to receive $5 million in license fees for a mega golf course complex in the northern Vietnam province of Hung Yen, according to a financial disclosure report released by the U.S. Office of Government Ethics.
Real Estate - Tue, June 17, 2025 | 9:26 pm GMT+7
Vietnam continues to drill oil discoveries, helping to ensure national energy security: broker
Vietnam has been consistently discovering oil in wells across both producing and developing fields, which, according to leading broker Vietcombank Securities (VCBS), will help ensure national energy security amid a rapid decline in domestic gas supplies.
Economy - Tue, June 17, 2025 | 5:08 pm GMT+7
Chinese companies seek to further partner with Vietnam Electricity
Several Chinese companies met with state utility Vietnam Electricity (EVN) between May 27 and June 12, seeking more cooperation opportunities.
Companies - Tue, June 17, 2025 | 3:50 pm GMT+7
Unilever to expand investment capital at southern Vietnam plant to $105 mln
Unilever Vietnam plans to raise the investment capital of its factory in Ho Chi Minh City, a southern metropolis, to VND2.7 trillion ($104.5 million), according to a recent environmental impact assessment report.
Industries - Tue, June 17, 2025 | 2:45 pm GMT+7
VAT in Vietnam cut to 8% for July 2025-Dec 2026 period
The National Assembly, Vietnam's legislature, has reduced the VAT rate from 10% to 8% for goods and services from July 1, 2025 to December 31, 2026.
Economy - Tue, June 17, 2025 | 2:13 pm GMT+7
Subsidiaries, affiliates ineligible for preferential corporate income tax in Vietnam
Subsidiaries and affiliates of enterprises in Vietnam will not be eligible for preferential corporate income tax (CIT) rates of 15-17%, starting from October 1, a move aimed to prevent abuse of incentives.
Economy - Tue, June 17, 2025 | 1:26 pm GMT+7
Vietnam Airlines to launch direct routes to Northern Europe, Italy
Vietnam Airlines will open a direct route from Vietnam to Italy on July 1, and another to Northern Europe on December 15, expanding its network to European countries, the national flag carrier stated on Monday.
Companies - Tue, June 17, 2025 | 12:05 pm GMT+7
Vietnam tightens rules on private placement bond issuance
Vietnamese businesses will only be permitted to issue private placement bonds if their total liabilities do not exceed five times their equity, according to a newly adopted law.
Finance - Tue, June 17, 2025 | 11:44 am GMT+7
Vietnamese property major Hoang Huy’s subsidiary eyes HCMC bourse listing in H2
CRV Real Estate Group JSC, a member of Vietnam's major property developer Hoang Huy Group (TCH), seeks to list its shares on the Ho Chi Minh City Stock Exchange (HoSE) in the second half of this year.
Real Estate - Tue, June 17, 2025 | 8:52 am GMT+7
Southern Vietnam province Kien Giang seeks private investment for 40 key projects
The Mekong Deleta province of Kien Giang has announced a list of 40 projects calling for private investment in 2025, with total capital of over VND226.7 trillion ($8.7 billion).
Industries - Mon, June 16, 2025 | 11:45 pm GMT+7
ASEAN poised for greater role in global economy
ASEAN could emerge as the world's fourth-largest economy in the coming decades but the regional bloc must accelerate integration, strengthen institutions, and adapt to global shifts to realize this potential, experts have said.
Southeast Asia - Mon, June 16, 2025 | 11:34 pm GMT+7