The Vietnam Association of Construction Contractors wants the Government Office to investigate why steel prices have skyrocketed, pushing many contractors to the brink of bankruptcy.
Prices have risen by 30-40 percent since the end of 2020, according to the Vietnam Steel Association (VSA).
Chairman of the contractors association Nguyen Quoc Hiep said: “Contractors are facing difficulties because most of them execute projects with fixed prices. The contract value will not change through the project, regardless of the surging steel prices.”
Steel costs typically account for 10-30 percent of a construction project.
Quang Trung, deputy director of Long Giang Foundation, a construction company in Hanoi, said: “Contractors compete with each other on costs, and each time steel prices rise, our losses mount.”
The company has turned down three contracts this year because the rising steel prices would have caused losses, he said.
The Covid-19 pandemic severely affected the construction industry last year. With the pandemic contained, the industry had just started to recover when contractors were hit hard by the skyrocketing steel prices.
VSA forecast prices to continue rising until the end of the third quarter since supply of intermediate goods for steel production from China and India is low.
Besides, iron ore prices have risen 55 percent this year to over $170 per ton.