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Builders Face Doom As Steel Prices Rocket
By Ignatius Stephen & Lily Libo-on

Bandar Seri Begawan – Brunei’s building contractors are facing disaster because of events in China and Iraq.

Builders and developers, who have cashed into the current shop house construction boom, are now in trouble because steel prices have gone up a whooping 20 per cent. Other building material cost has also increased.

“It’s grossly unfair that the authorities have allowed the price of steel and other building materials to go up so much without any warning,” a local building contractor said.

Price curbs should be imposed, he said, adding that the situation could cause a recession in the construction industry.

“Some people may not be able to afford buying property as contractors have no choice but to increase prices because of the rising costs of building materials,” he said.

Meanwhile, Radio Television Brunei (RTB) reported that the price of steel has gone up 20 per cent because of two factors.

The unprecedented building boom in Iraq has consumed considerable amount of building materials, including steel bars and as China converts from an agricultural country to an industrial one, it has also contributed to a worldwide steel shortage.

The global price of steel products has risen by more than 100 per cent to an average of US$630 per tonne from US$310 per tonne since December.

According to Thailand’s The Nation, China’s demand is so great that it is gobbling up steel all over the world where Chinese companies have been bidding up the price.

Chinese companies are said to have paid US$320 (B$544) to US$340 (B$578) per metric tonne. The domestic price used to be below US$300 (B$510).

Local builders said that while it is understood that the global steel shortage is caused by a bullish economy in China and reconstruction in Iraq, other building materials in Brunei have no reason to increase by an average of 30 per cent.

Borneo Bulletin reported that local property developers are hoping for intervention from relevant authorities to stop the increase in the prices of construction materials.

A developer said that the price of steel bars have increased from $450 a tonne to $650.

Steel bar suppliers, on the other hand, are saying that the price of steel bars could even go much higher, possibly $1,050 a tonne.

They said that the price of sand will increase by $20 sometimes this month, adding that the current price of a truckload of sand is currently pegged at $70.

“The price of bricks may follow suit. If there is no intervention by the government, developers and contractors will suffer,” they said.

They added that the increase in prices of building materials could put developers of medium-cost housing in a limbo, saying that some housing projects could be abandoned by developers.

They suggested that building materials should be included in the controlled items so suppliers would not be able to raise the prices without approval from the authorities.

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