Although this is peak construction season, enterprises dealing in construction materials are continuing to face huge inventory with little activity in the building trade.
|Construction material market is currently facing severe gloom (Photo: SGGP)|
The largest national exhibition in the construction sector ‘Vietbuild’, which opens twice a year in Ho Chi Minh City, is seeing slow response in supply and demand.
The event has attracted nearly 800 foreign and local firms displaying their wares in more than 2,160 booths, but like one participant complained that the number of visitors have decreased drastically and in five days, his company has signed only three contracts worth VND300 million (US$14,235), half compared to that in previous exhibitions.
The situation is the same in construction material stores along To Hien Thanh and Thanh Thai Streets in District 10.
Commodities flood stores but no customers are seen. Tran Thi Lan, a store owner in To Hien Thanh Street, said in previous years the store had monthly turnover of around VND1 billion (US$47,450) but the store now sells only bath showers, bidets or faucets in recent few weeks, although this is peak construction season.
Vietnam Construction Materials Association said some companies have stopped cement production while others have reduced production. The same situation is taking place in other sectors, namely, ceramics, porcelain, glass and bricks.
Meantime, local manufacturers are suffering high inventory, while imports still flood the market resulting in more difficulties for home firms due to severe competition.
According to the Vietnam Steel Association, each month around 300,000 tons of steel is consumed in the country while the figure is more than 400,000 tons a month.
Upto 350,000 tons of steel and 450,000 tons of steel billets are lying in inventory. As a result, steel manufacturers have reduced production to half or even stopped operations.