Rising cement, steel prices hit construction sector
Rajamahendravaram: A sharp increase in the prices of cement, steel and other construction materials is adversely affecting the construction sector across the combined East Godavari district. The surge in costs is being linked to the ongoing conflict in West Asia, which has disrupted supply chains and impacted the availability of key industrial inputs.
With gas supplies to industries facing interruptions, production of essential materials such as steel and cement has been affected, leading to a steep rise in market prices. Builder and contractor B Haribabu of Rajamahendravaram says the sudden escalation has made it difficult to continue ongoing projects, while several new constructions are being delayed.
The burden is also being felt by middle and lower-income households, many of whom are finding it increasingly unaffordable to build homes. Industry representatives note that unless supply stabilises and prices ease, the sector may face prolonged challenges.
Financial expert Kotha Nageswara Rao opined that continued volatility in raw material costs could slow down development activity in the region and place additional financial strain on both developers and consumers.
According to market sources, steel prices have risen steeply over the past 20 days. While a ton of steel was priced around Rs 65,000 at the beginning of the recent conflict in West Asia, it has now increased to between Rs 75,000 and Rs 78,000. Cement prices have also increased, with each bag costing Rs 50 to Rs 70 more compared to the rates two weeks ago. Prices of tiles and marble, widely used in house construction, have also increased significantly. Traders stated that most tiles are sourced from other states, and disruptions in supply have resulted in shortages in the district. Due to gas shortages, several manufacturing units in different regions have either reduced production or shut down, affecting supply chains.
V Srinivasa Rao, who is constructing a house at Konthamuru, said tile prices have increased by Rs 5 to Rs 10 per square foot. He added that quality tiles are not readily available, forcing him to halt construction work for the past 10 days. Achanta Srinivas, a consultant, said the supply of tiles from Gujarat and Rajasthan has slowed down considerably. He noted that construction costs, which were around Rs 2,500 per square foot earlier, have now crossed Rs 3,000, leading to a slowdown in the sector.
The rise in costs is not limited to major materials. Prices of gypsum sheets used for false ceilings have reportedly increased by up to Rs 500 per sheet. Zinc pipe rates have gone up from Rs 75 per kg to Rs 90, while a 20-foot plastic pipe that cost Rs 300 about 20 days ago is now priced at Rs 450.
With overall construction expenses rising sharply, many middle- and lower-income families are finding it difficult to proceed with house-building plans. Industry observers warn that if the situation persists, it could also affect the livelihoods of thousands of workers dependent on the construction sector.
