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Season of Construction is on!

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With the end of summer and start of winter, construction season has started in Nepal. The construction of private houses has begun since the beginning of November. Usually, people plan the building process with the aim of moving to the new house before the raining season starts. The rise of constructions also leads to increasing price of construction materials like bricks, iron rods and sands. Not only private housing but government contract work also starts in this season. This increases the sales of construction materials in the market. Therefore, the period from November to July is considered the construction season in Nepal.

Due to the pandemic, the construction business was in a slump for nine months. The private as well as the government construction work has been shut down since April. However, with the increasing number of building works, the construction sector seems to be back in business. Here is some information on the price of the main construction materials and what will be the cost in the next few months.

Rise in Price of Iron Rods

The price of iron rods, which fell to 60 rupees per kg a few months ago, has now crossed 80 rupees. The price of construction material have started rising as soon as the festivals were over. Before the festival, the iron rods were available at 78 to 87 rupees per kg according to its brand.  But now it has gone up by 5 rupees. Even though there is no high demand in the market, the producers have started selling these rods in higher price. It seems that the manufacturing company may have increased the price of iron rods as construction work picks up speed.

Low Demand for Cement

Cement cannot be stored for more than two months. The construction business was halted for months due to the pandemic. This decreased the demand of cement and the price became low too. At present, the market for cement has shrunk by an average of 25 percent. The price of cement is around 550 to 650 rupees per barrel. The various brands and cement type like OPC, PPC has reduced the price of cement from 25-30 rupees to 100 rupees. The manufacturers have sold at 5-10 rupees less than the price due to the low demand.

Increase in Price of Bricks

Due to the pandemic, the workers for brick industry has not returned for work. Due to this, there is a shortage of workers in the brick kiln. However, one third of the brick manufacturers have enough stock. Even though there is a stock of bricks worth about one billion rupees, the price has not lowered. Instead, it has become natural for the price of stock bricks to go up as there is no mass production of bricks. At present, bricks can be bought at 15 to 18 rupees per unit which is almost the same before the pandemic. The price of bricks has gone up to 2,000 rupees in a single trip amid the Covid-19 pandemic.

Price may Increase of Rubble and Sand

The current price of sand is 24,000-25,000 rupees and that of rubble is 22,000-25,000 rupees. At present, they are being sold at the same price as it was before the pandemic. However, the price had decreased due to the low demand during the lockdown period. Even though the demand for rubble and sand seems to decrease now. The fact that the price has remained stable indicates that the price will increase in the future if the demand increases. More than 80 per cent of these industries are operating without renewal of the license. The government has warned that it will shut down the illegal crusher industry. Even if the industries pay some commission for the smooth operation of their industry, the customer are the ones who have to pay the price.

Even before the pandemic, the prices of these construction materials used to increase during the construction season by 25-30 percent. Whereas in the off-season, it used to decrease. The manufacturers and traders used to increase the price as soon as the construction was on. The prices of construction materials have started increasing with the start of this year’s construction season too. However, if the pandemic continues and the demand is low, the price will decrease as well.

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