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| Ready-mixed concrete trucks are parked at a cement factory in Seoul, Sunday. Yonhap |
By Park Jae-hyuk
A conflict between builders and cement firms has intensified over a recent decision by producers to hike prices for the fourth time in two years, according to industry officials, Tuesday.
Last Friday, Sungshin Cement sent a letter to ready-mixed concrete truckers notifying its plan to increase cement prices by 14.3 percent in July. This came after Ssangyong C&E declared a 14.1 percent hike in its cement price effective next month. Both companies suffered operating losses during the first quarter of this year.
Hanil, Asia and Sampyo Cement, which made profits during the first quarter, have yet to announce their price hike plans. However, construction industry officials expect the other cement firms to follow Sungshin and Ssangyong in the near future.
Although cement firms claim that the soaring electricity bill has made it inevitable for them to raise their product prices, builders view the claim as groundless, considering the fact that the international bituminous coal price has become one-third of that of a year earlier. After Russia invaded Ukraine last year, cement firms hiked their product prices citing the shortage of bituminous coal.
Once cement firms raise their product prices, ready-mixed concrete truckers ask builders to pay more. Last year, construction works were suspended nationwide as builders refused to accept the request from ready-mixed concrete truckers.
Instead of talking with the truckers this year, builders are trying to have direct conversations with cement firms, asking for disclosure of production costs. Builders have been wary of another nationwide suspension of construction works, as unionized truckers and construction workers are planning to strike next month.
In order to figure out whether the forthcoming cement price hikes are reasonable, the government ministries also held a meeting recently. However, it is still difficult for the government to directly control the market price.
"The industry ministry supervising the cement industry and the land ministry supervising the construction industry, as well as the finance ministry handling commodity prices, shared the situation of each industry, so as to help the companies reach an agreement," a land ministry official said.
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