Given the delicate situation presented by the constant rise in the price of construction materials, the government is not giving it the attention it deserves, says engineer Rafael Durán.
SANTO DOMINGO.- “This situation of the new increase in steel represents a paralysis of the construction sector, in addition to an increase in real estate prices,” says engineer David de la Cruz, of the construction company De la Cruz Félix Constructora, Inmobiliaria y Servicios.
And last Friday, steel prices turned upwards again, according to De la Cruz, who stated that a bundle of the metal skyrocketed to 81,000 pesos.
Jochimín Pérez Iglesias, from Constructora Jprez SRL, told the digital newspaper El Inmobiliariothat the price of steel has certainly risen again and reported that cement will also register an increase of between 15 and 20% this week.
“The situation for the most difficult sector cannot be worse; this will undoubtedly bring greater problems because when steel and cement prices start to skyrocket, all other supplies and materials begin to rise as well,” explained Rafael Duran of SBDS Investments.
He said that families will find it very difficult to afford the new housing costs. “For example, one million pesos is a lot for a person's monthly payment, and 20 years ago, during the Baninter crisis, some people fell behind on their payments because their bank installments increased by two thousand pesos. They accumulated three or four missed payments, and the banks had to sell their houses at public auction.”.
For engineer Durán, this situation is extremely worrying. He said he has sold units in a project that hasn't even started construction. "It's a delicate situation because we can't hand over houses at a loss, and it's possible the buyers won't be able to pay for them either. So what do we do, if we have financial obligations with the banks?".
He understands that, given the delicate situation presented by the constant rise in the price of construction materials, the government is not giving it the attention it deserves.
He explained that a year ago, for no reason whatsoever, the price of steel rose from 55,000 to 70,000 per bundle, simply because it was expensive in other countries.
Durán believes that the price of a bag of cement is unjustified at 350 pesos, because 90% of its inputs are local. “Those who produce it simply decided they had to earn more, and the goal is to take it up to 500 pesos.
On steel
Last March, the Dominican Steel Association (ADOACERO) reported that local manufacturers of finished steel products were constantly searching for new raw material suppliers, such as Mexico, Brazil, and Venezuela, to ensure the supply of the Dominican market since tensions began between Russia and Ukraine.
More than 35% of the iron and molten metal consumed in the Dominican Republic came from Ukraine, so since the conflict began, local producers proactively started to find new sources of supply in other countries in the region.
ADOACERO's CEO, Marcelo Salazar, explained that the war between Russia and Ukraine is causing historic peaks, never seen since the 2008 global crisis, in international prices for steel billets, which are the raw material for finished steel products.
ADOCEM
An article published in the Listín Diario newspaper on the 20th of this month reported that the companies that make up the Dominican Association of Portland Cement Producers (Adocem) believe that, given the volatility of international markets and the anticipated increase in energy and fuel costs, the same situation could occur as, according to press reports, is currently happening in Spain, where major cement and steel companies have closed their plants due to these excessive price increases that occurred long before the Russian invasion of Ukraine.
