Economy

Cement, steel prices jump

Published by Octron on January 28, 2010

The prices of the major construction materials — cement and steel in particular — have soared sharply in the market, pushing cost of constructions up by as much as 20 percent. Referring to supply bottlenecks at the time of main construction time, cement dealers have jacked up cement prices in a range of 18 to 32 percent as compared to prices recorded a month ago. Price of steel rod too has jumped by more than 22 percent than last month.

Retailers say the price of popular Nepali cements like Hetauda and Udaypur cement has jumped up to Rs 650 per sack (50 kgs). The increase is still sharper in case of Indian cement, according to the contractors. Latest pricing in the market shows that the price of Indian cement like Ultra-Tech has jumped to as high as Rs 725 per sack.

Since cement occupies 29 percent in the overall construction cost, such a sharp rise has made new constructions expensive by about 10 percent than what it was a month ago, said Roshan Dahal, a contractor and also the past president of Nepal Construction Materials Dealers´ Association. Talking to myrepublica.com, Dahal elaborated that the rolling mill association — an association of steel manufacturers — too has raised the prices of steel rod to Rs 76 per kg. A month ago, it was priced Rs 62 per kg.

The association has attributed the rise to increment in prices of raw materials in international market and also the increasing load shedding hours, which has added cost of production. The jump in prices of steel rod, another crucial construction material that weighs 29 percent in overall construction cost, has further added financial burden of about 7 percent.

Apart from these two materials, contractors said the price of sand too jumped to about Rs 50 per cubic feet. The rate is two-fold of what prevailed in the market during this season last year. It is also a rise of about 18 percent than the price recorded a month ago. Dealers, moreover, informed myrepublica.com that brick manufacturers, who earlier booked supplies ahead of the manufacturing season at Rs 6,000 per thousand units, have again refused to lower the prices.

“Buyers, who booked the supply a month ago, are getting the supplies at lowered rates. But if you want to place order to retailers or manufacturers now, you will still need to pay about Rs 8,000 per thousand units,” said Dahal.

Price Table

	Jan 2009	Dec 2009	Jan 2010
Cement	Rs 465/50 kgs	Rs 550/50 kgs	Rs 650-725/50 kgs
Rod	Rs 62/kg	Rs 62/kg	Rs 76/kg
Bricks	Rs 3,000/1,000 pcs	Rs 8,000/1,000 pcs	Rs 8,000/1,000 pcs
Sans	Rs 40/cubic feet	Rs 42/cubic feet	Rs 50/cubic feet