If these price increases continue and the government does not take steps to ease import restrictions and review antidumping measures imposed on major producing countries such as Costa Rica, Turkey, etc., the housing sector will be severely affected.
SANTO DOMINGO.- The increase in the price of steel last week is a situation that worries the Dominican construction sector, whose representatives say that this item can represent up to 15% of a housing construction project.
Guido Rosario, CEO of Constructora Rodos, described the increase in the price of a bundle of that material as serious on Monday, which experienced a rise of three thousand pesos in one fell swoop, as a consequence of the pressure on the market generated by the war in Ukraine; and there are fears that further increases may be coming.
“If these price increases continue and the government does not take steps to ease import restrictions and review antidumping measures imposed on major producing countries like Costa Rica, Turkey, etc., the housing sector will be terribly affected and will distance the government from its housing production goals in plans like Vivienda Feliz,” the engineer stated.
He said the outlook for the conflict between Russia and Ukraine does not appear favorable and pointed to JP Morgan's recent estimate of oil barrel price projections, which the financial company said could reach up to US$185. He considered that this creates a lot of tension in the markets and would further increase housing prices due to the affected items.
Rosario insisted that the government should look for ways to make antidumping measures more flexible and review them to lessen the impact of importing billets (raw material for making rebar); so that the market can be revitalized and the construction sector, and therefore the national economy, is not affected.
The RODOS representative noted that construction is one of the sectors that contributes most significantly to the Dominican Republic's Gross Domestic Product (GDP). Central Bank reports ranked the sector as the second fastest growing in 2021, reaching 23.4%
For his part, engineer Pedro Oguis, from Constructora Élite Ingeniería, in Santiago, defined the current scenario as one of great uncertainty, because "we don't know what awaits us with all the price increases; we are in a very complex and complicated situation right now," he stated.
He said that the longer the conflict lasts, the more damaging the situation will be for the world economy and, of course, for the Dominican economy.
The increases
Last week, engineer Arturo Espinal, president of the Dominican Association of Hardware Stores (ADEFE), reported that the price of steel began to be quoted three thousand pesos higher in the local market.
He attributed the increase to the pressure generated by the crisis in Russia and Ukraine, which are among the main importing countries of the material.
“When those countries leave the market, they put pressure on the market that remains open, which does not always have the capacity to immediately supply the demand, and this effect causes a price increase, even if the local industry has not purchased at new prices,” Espinal explained.
He believed that the rise in steel prices could cause derivatives such as nails, wire rod, and those linked to steel to skyrocket in the coming days.
Last year, the Dominican Republic imported more than $300 million worth of iron and steel from Ukraine.
Oil prices near US$140 amid possible ban on Russian crude
Russia's invasion of Ukraine and the increase in economic sanctions against Moscow led to gas and metal prices such as aluminum, copper, and palladium reaching new all-time highs on Monday.
Brent crude, the European benchmark, was approaching $140 a barrel at the start of the Asian session, close to its all-time high of $147.50 reached in July 2008, before soaring oil prices fell in the markets.
