Construction material price forecast for 2020

Investors, contractors, and individual customers all research and consider construction material prices before making purchases in order to choose the right time to buy. For the total construction cost of a completed project, construction materials always account for a significant portion. Below is LPC's forecast of construction material prices in 2020, providing readers with additional reference information.

1. Scope of the 2020 construction material price forecast

Before analyzing and forecasting construction material market prices in 2020, we need to clearly identify the types of construction materials, or the scope of these products. The main construction material products belong to two groups:

2. Construction material prices in 2020 will largely depend on market demand

To accurately forecast construction material prices in 2020, many changing factors must be taken into account. However, the most important factor remains the level of construction demand at that time.

If market supply exceeds demand, product prices will decrease. Conversely, if demand exceeds supply, it will drive up construction material prices. According to statistics and forecasts, the population is expected to continue growing rapidly next year, inevitably leading to increased demand for housing. Urban construction density is becoming increasingly dense, while large-scale projects are being promoted to address this issue.

In addition, Vietnam's investment environment is currently very attractive, attracting foreign capital, while many factories, international conferences, and tourists are coming to the country. These factors are contributing to the development of the real estate market, leading to increased demand for construction materials. Therefore, construction material prices in 2020 are forecast to increase.

3. Detailed forecast of construction material prices in 2020

According to the latest market analysis and survey conducted by LPC, construction material prices in 2020 are forecast to be higher than in 2019. Specifically:

a. Construction sand supply will become scarce

By 2020, the total estimated exploitable sand reserves are expected to be very low and insufficient to meet demand. Data shows that total exploitable reserves are expected to reach only nearly 250 million m³, while demand could reach 366 million m³. This shortage will drive sand prices higher. The use of manufactured sand is being implemented as a solution, but it cannot immediately stabilize the market.

b. Cement prices are also unlikely to avoid an increase

Although domestic cement production is increasing, relocating factories and grinding stations away from urban areas in accordance with policy may cause temporary production disruptions. This could lead to localized shortages and price increases in 2020 and the following years.

c. Construction iron and steel prices will increase significantly

With excellent bending capacity and a wide range of sizes, iron and steel are being increasingly improved. New import and export policies are also making it more difficult to import iron and steel, inevitably causing construction steel prices to increase in 2020.