Building materials market forecast to be robust in 2021

Bricks produced at Khang Minh Brick Joint Stock Company. (Photo: VNA)

Hanoi - The building materials market is forecast to be robust this year, with the demand fuelled by the increase in infrastructure development investment and the recovery of the property market, according to the Ministry of Construction.

There were increases in demand for building materials this year, Pham Van Bac, Director of the ministry’s Department of Building Materials said.

Repairing infrastructure damaged by the floods in the central region and landslides in mountainous areas would require a large volume of construction materials. In addition, the real estate market was expected to recover, which would lead to increases in real estate investment, pushing up demand for construction materials.

With such good demand, the construction materials market would be very robust this year, he said.

Bac said the supply industry needed to prioritise projects producing new material, of large-scale and advanced technology as well as projects which use waste from other sectors.

According to VNDirect Securities Company, the building materials industry would benefit greatly from the trend of increasing investment in development this year.

One of the notable infrastructure projects was the North-South Expressway.

VNDirect estimated that 40 percent of the public investment for road and 11 component projects would be disbursed in 2021. Around 23.7 trillion VND or 60 percent of the construction costs would be allocated to building materials. It was estimated that these projects would need asphalt worth around 5.9 trillion VND, steel 6.4 trillion VND and cement 3.8 trillion VND this year.

To complete these projects by 2023, expenses for asphalt, steel and cement would be 20.8 trillion VND, 14.8 trillion VND and 8.9 trillion VND, respectively.

Vietnam could also benefit from China’s plan of investing in infrastructure development, which would push up China’s demand for imported steel and cement, according to VNDirect which also forecast the trend would continue to mid-2021 at least.

According to S&P Global Platts, China approved 14 airport projects worth around 15.3 billion USD last year, together with 22 railway projects.

Vietnam’s export of cement and steel to China saw significant increases in recent months.

Statistics showed that cement export to China rose by 102 percent in volume in the first 11 months of last year while steel export to China jumped by 1,414 percent in the January-October period.

In August, the Prime Minister approved the strategy of developing construction materials in 2021-30 period which encouraged investment in projects which used advanced technology in production, energy saving and environmentally friend buildings.