Rise in cement, steel price worries builders

It has come as a rude shock to the real estate developers, who have just resumed the construction activities after a gap of about two months due to the lockdown.

According to industry sources, depending upon the brands, a bag of cement was sold between ₹ 370 and ₹390 before the lockdown. It has now gone up to ₹420 a bag in Tiruchi.

Similarly, the rate of steel has also gone up. Before March 25, the price of a tonne of steel was hovering between ₹40,000 and ₹45,000. It is now priced between ₹45,000 - 48,000 a tonne.

The rise in prices of cement and steel, essential material components of construction activities, has not gone well among the individual house promoters and flat promoters, who have already been hit hard due to poor demand for houses.

It is claimed that the cost of construction will go up by 15% to 20% if the prices are not checked.

‘It is a worrisome factor. The price rise is sudden. We are forced to shell out ₹100 more per cement bag. It has affected the construction industry hard,” says P. Ravichandran, Managing Director, Royal Shelters, Tiruchi.

He said that it would not only affect the flat promoters and individual house constructors but also those, who had undertaken government projects such as bridges, culverts and buildings.

Mr. Ravichandran said that the industry had actually expected that the price of steel and cement would become cheaper at least by 5% to 10% due to zero construction activities for the last two months. But, the rates had been gone up.

I. Shajahan, president, Confederation of Real Estate Developers Associations of India (CREDAI), Tiruchi chapter,said that if the price hike was 2% to 3% it was understandable. The developers had just begun to resume stalled projects after two months and the price was not justified. It would increase the cost of projects substantially and it would have cascading effects on the construction industry.

Seeking immediate intervention of the State government on the issue, he said that the CREDAI had sent representation to the Chief Minister and senior bureaucrats in Chennai seeking steps to stablise the price rise.