Kuala Lumpur, 3 February 2021 – Construction Industry Development Board (CIDB) will review the causes and address the impacts of increasing price of steel bars in the construction sector.
The CIDB records state that the prices of all building materials were stable throughout 2020, except for steel bars and other iron-based building materials that have been increasing. Among the possible causes of increase are the difficulty in obtaining raw materials due to the mining activities restriction; logistics issues that delay delivery for imported materials; and the decreasing demand during the pandemic that prompted mining companies to reduce their activities.
Aside from that, the price increases may also be caused by the unstable cash flow in the construction industry. The payment terms between contractors and suppliers will affect the price of building materials. For example, suppliers tend to raise prices due to higher risks of late payment by contractors, as they might be receiving late payments from clients as well.
- January to April 2020: The price of steel bars was at RM2,435 per metre.
- May to July 2020: The price dropped by 6.4 per cent to RM2,278.
- August 2020: There was an increase of 2.2 per cent to around RM2,300.
- December 2020: It increased significantly by 22 per cent to RM2,800.
- January 2021: The price stood at RM2,890.
“The pandemic has indeed brought great challenges to all sectors, especially construction. CIDB will review the measures to address this problem, to ensure sustainability and livelihood of this sector,” said Datuk Ir. Ahmad ‘Asri, Abdul Hamid, CEO of CIDB.
– Construction+ Online