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Global Economic Impact and the Current State of the Ready-Mix Concrete Market

To date, the global economy remains in a state of uncertainty due to the ongoing conflicts in the Middle East. Most notably in Vietnam, surging fuel prices—with no signs of slowing down—have placed significant pressure on the production costs of housing and infrastructure projects.

Current Status of Ready-Mix Concrete Prices

Thanks to its flexibility and convenience, ready-mix concrete (RMC) has made construction significantly easier and faster than in previous years. Accordingly, as concrete quality and project longevity improve, the selection of raw materials has become much more stringent.

Currently, the retail price of stone has surged by over 40%. This is primarily due to a complex supply chain involving extraction, crushing, port transportation, and multiple intermediaries. Since the entire process relies on machinery powered by fuel, an increase in overhead costs is inevitable, inadvertently placing a heavy financial burden on consumers.

This situation is not limited to stone but also affects other materials like river sand and manufactured sand. Meanwhile, although products such as cement and additives have experienced some fluctuations, the increases are relatively minor and have not yet caused significant market alarm.

Under these cost pressures, the ready-mix concrete market has undergone more than 12 price adjustments since March. Amidst this volatility, SMC Concrete has maintained its position through effective resource optimization. We offer a diverse portfolio of stone, sand, cement, and additives, allowing us to customize solutions for specific project requirements while ensuring the most competitive and reasonable prices for our clients.

The Need for Regulatory Mechanisms to Avoid Price Shocks

In the long term, the market requires macro-regulatory mechanisms to prevent extreme price shocks. According to Mr. Luong (Deputy Director of the Vietnam Institute of Real Estate Market Research and Evaluation), the State should act as a "policy arbitrator" by reducing or deferring taxes, fees, and land rent for ongoing projects. Additionally, there should be mechanisms to adjust construction contracts and material price indexes to protect contractors from losses. Banks should also consider restructuring debts to maintain cash flow within the market.

On the corporate side, developers need to proactively optimize costs and offer extended payment plans to customers instead of passing the entire cost burden onto selling prices.

Echoing this view, Mr. Nguyen Van Dinh (Vice Chairman of the Vietnam Association of Realtors) noted that material costs currently account for about 50% of total construction value. Consequently, if the upward trend in material prices persists, housing prices are unlikely to decrease in the near future. Only through seamless coordination between the State, businesses, and banks can the market sustainably navigate this volatile period, ensuring the interests of homebuyers and the stability of the economy.