The price of building materials on the rise

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Market News

The price of building materials on the rise


Construction crane is used to place precast concrete panels. PICTURES | COURTESY

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Summary

  • The shortage is compounded by supply fears linked to Russia’s assault on Ukraine, the ongoing war and a series of Western sanctions raising fears of disruption.
  • Steel prices on the international market have risen by around $135 (Sh15,390) per tonne since February 2022, when the dispute began, and are expected to rise further.
  • Steel is used to make roofing sheets, rebar, steel beams and columns, windows and doors, among other products.

The price of key building materials, including steel, paint and cement, has soared due to local shortages, prompting industry groups and contractors to warn of a slowdown in the sector.

This should increase the cost of acquiring or building new homes.

“An assessment of market trends has shown that some steel products have increased by up to 40% since December 2021 to date,” the Architectural Association of Kenya (AAK) said.

The shortage is compounded by supply fears linked to Russia’s assault on Ukraine, the ongoing war and a series of Western sanctions raising fears of disruption.

Steel prices on the international market have risen by around $135 (Sh15,390) per tonne since February 2022, when the dispute began, and are expected to rise further.

Locally, a kilo of steel has fallen from Sh100 at the end of last year to Sh180.

Steel is used to make roofing sheets, rebar, steel beams and columns, windows and doors, among other products.

Russia and Ukraine account for nearly 20% of world steel exports.

“I see implications like anything that impacts construction materials ultimately affects the cost of construction,” said Daniel Ojijo, a Nairobi-based developer.

Bamburi Cement Plc #ticker: BAMB has become the latest company to announce plans to raise product prices by 2-10% from March 10 due to higher raw material costs.

“We would like to ask the Kenyan government to consider adopting tax breaks for paint, steel and cement manufacturers as well as stimulus packages and sector-specific policies that will help remedy the situation and cushion the construction industry which contributes an average of 7% to the country’s GDP,” AAK said.

A bag of cement went from Sh600 to Sh800 to Sh1,000 – depending on the brand – in western Kenya, which is struggling with a shortage.

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