Rising construction material prices put a burden on construction projects

Sand is one of the construction materials that is increasing in price rapidly and in short supply.

Since the beginning of the year, prices of many key construction materials such as steel, cement, sand, stone, etc. have recorded sharp increases, causing significant consequences for construction progress and payment capacity at many construction projects across the country.

According to statistics from the Ministry of Construction, construction steel prices have increased by an average of 12-15% compared to the same period in 2024, while cement prices have increased by 8-10%, construction sand has increased by more than 20% in some areas with high demand such as Ho Chi Minh City, Hanoi, Binh Duong . This development has led to a significant increase in input costs for projects, directly affecting the progress and capital disbursement plan.

The rapid and unstable increase in construction material prices is causing many investors and construction contractors to face difficulties in balancing their finances and implementing projects according to plan. Many bidding packages have to adjust their progress, or even temporarily stop waiting for updated unit prices.

Mr. Nguyen Van Hung, Director of a construction company in Hanoi , said that construction costs have increased by about 15-20% compared to the original estimate. Without a mechanism to adjust prices or timely support, it will be difficult for businesses to complete projects on schedule. This situation especially affects projects using state budget capital and public investment capital.

Some localities also reported that due to the slow price adjustment mechanism, many projects have been delayed by 1-3 months, affecting the disbursement plan and the efficiency of investment capital use.

Faced with the above situation, the Ministry of Construction has issued a document requesting localities to promptly update the construction price index, while strengthening the control of the construction materials market, preventing speculation and price manipulation. The Ministry of Finance is also coordinating and studying the mechanism for adjusting the budget estimate in accordance with market price fluctuations.

Experts say that if construction material prices continue to remain high or increase further in the last months of the year, many key projects are at risk of having to delay progress, affecting the country's infrastructure development goals, investment attraction and economic growth.

According to experts, there are several main reasons for the sharp increase in the price of construction bricks - and construction materials in general - in recent times in Vietnam. First of all, input costs have increased. Prices of raw materials such as sand, stone, coal, slag and clay have increased: sand has increased by about 10% compared to the end of 2024 (140,000 - 400,000/m3), stone and coal have also increased sharply. The price of slag used to burn brick kilns has increased by 40 - 50% compared to last year...

At the same time, energy and transportation costs are high. The price of gasoline, electricity and gas has increased (affecting the production of cement and bricks), causing the cost of transporting materials to increase sharply. In remote areas such as Dak Nong, the cost of transporting sand has increased 2-3 times due to the long distance. Meanwhile, the supply is limited.

Due to strict environmental protection regulations on sand, stone and clay mining, some mines have even had to stop operations. Not to mention the damage caused by natural disasters such as storms and floods (for example, after Typhoon Yagi), many brick factories have also reduced their capacity or stopped operating. Meanwhile, the demand for traditional fired bricks remains high, while the supply has decreased slightly.

Cement production at La Hien Cement Joint Stock Company - VVMI.

Another factor is the increased “demand” from public investment and the real estate market. Since the beginning of 2025, a series of key infrastructure, social housing, and transportation projects have started construction, leading to a “sudden” increase in demand for materials. The real estate market has recovered after amending the Land Law, Housing Law, and Real Estate Business Law, combined with expanded public investment, causing total demand to far exceed supply.

Speculation, hoarding and price manipulation have also had a significant impact on the market. Speculation and hoarding have occurred in some areas (Da Nang), causing the prices of sand and bricks to escalate unreasonably. The Prime Minister even had to ask the police to investigate and deal with this market manipulation.

Specifically, in Official Dispatch No. 85/CD-TTg on strengthening solutions to manage and stabilize construction material prices, Prime Minister Pham Minh Chinh assigned the Minister of Construction to urgently review, direct and guide localities to review, evaluate and synthesize the demand for construction materials in the area; coordinate with the Ministry of Agriculture and Environment to guide and direct localities to plan and identify mines, supply sources, capacity and supply capacity to ensure supply-demand balance, promptly handle difficulties and problems, especially local shortages in each locality and nationwide.

At the same time, the Minister of Industry and Trade directed market management agencies to strengthen inspection, promptly detect and handle acts of speculation, hoarding, and unreasonable price increases; thoroughly handle construction materials of unknown origin, counterfeit goods, fake goods, and poor quality goods.

The Ministry of Public Security is assigned to preside over and coordinate with relevant agencies to investigate and strictly handle organizations and individuals who manipulate the market, speculate and profit in the production and trading of construction materials, and those who cover up, protect, corrupt, and ignore violations that recur without thoroughly handling them.

On the other hand, the impact of global supply chains such as international logistics disruptions, increased freight rates due to the oil and gas crisis and geopolitical tensions also contributed to the increased cost of importing raw materials.

Along with the impact of weather factors such as storms and floods, unusual weather can disrupt the production and transportation of bricks, causing scarcity and pushing prices up, psychological factors also have a certain impact. The real estate market is showing signs of warming up, people tend to build and repair houses, which also creates a psychology of buying more bricks, contributing to the increase in the price of bricks in particular and construction materials in general.

Affected by the increase in construction material prices, in Son La province, many projects, businesses and people are facing difficulties due to high prices and local shortages in supply, affecting construction plans and progress as well as causing many unnecessary costs.

Director of Son La Department of Construction Dao Tai Tue shared that, in general, the supply of construction materials in the province still basically meets the demand, but the main reason for the local shortage is the low rate of mining licenses. The whole province currently has only 38/162 mines licensed for mining and operating, accounting for only 23% of the approved planning. This rate has caused an imbalance in supply and demand; especially for landfill, stone, and construction sand in some localities.

According to Mr. Tue, the current licensing process for mining minerals for construction materials usually involves many steps and is time-consuming, causing difficulties for businesses and slowing the operation of mines. These are significant challenges that both state management agencies and businesses are facing.

Similarly, the Hanoi People's Committee also sent Document No. 3873/UBND-DT to the Ministry of Construction, requesting early guidance on survey methods and price adjustments to remove difficulties for public investment projects.

Actual surveys show that since the beginning of the second quarter of 2025, prices of key construction materials such as steel, cement, sand, stone, etc. have increased sharply, with some items increasing by 15-25% compared to the beginning of the year. The market has also recorded a shortage of construction sand in many northern regions, forcing contractors to stop construction or adjust progress.

At some key projects in Hanoi such as Ring Road 4, the West Lake renovation project, the road connecting Gia Lam district with Dong Anh, many bid packages have been seriously affected. Some contractors have reported that the budget estimates from the beginning of 2024 are no longer consistent with actual prices, leading to the risk of heavy losses or even abandonment of the project - Hanoi People's Committee cited.

Construction experts warn that if material prices continue to increase uncontrollably and there is no timely update mechanism, public investment projects will not only be behind schedule but also affect disbursement, thereby slowing down local economic growth.

The rising price of construction materials is not only a technical problem but also a policy challenge that requires quick action from both central and local levels. If recommendations like Hanoi’s are not responded to promptly, a series of public works will fall into a state of “congestion” – something unacceptable in the current stage of public investment disbursement.

bnews.vn

Source: https://baolaocai.vn/construction-materials-increase-price-don-ganh-nang-len-cac-cong-trinh-post881338.html