Sudden Decrease in Price of Metal
It has been an amazing ride this year! First, commodity prices were going up at an obviously unsustainable rate. Now prices material prices (internationally) have crashed. One easy example, copper, which was selling for 4.01 dollars per pound is now under 2.00 dollar per pound, gas which was up to 150 dollars per barrel is now down to around 65.
How does this impact the price of raw materials that we need to build a house? If you remember the previous post here Inflation in the price of building materials in Thailand we have been concerned about the recent price run up. Well, of course what goes up must come down!
Interestingly, although metal prices (which makes up approximately 11 percent of the budget of a typical bungalow project) have come back down to mid 2007 levels, the prices of cement is still near the high. My assumption is that prices of all building materials will start to creep down from here with the metal price the quickest to respond, due to the fact that it is driven by international demand/pricing.
The following update shows the current pricing of the selected materials I reported on before…..
Specification (English)
Specification (Thai)
Price Jan 1, 2008
Price Aug 21, 2008
Price Nov 6, 2008
Rebar 2 Hun 6 mm. SD30 (Dem)
เส้นกลม ¼ (มอก) โรงเล็กทั่วไป
50
82
45
Rebar 3 Hun 9 mm. SD30 (Dem)
เส้นกสม 3/8 โรงเล็กทั่วไป
102
155
93
Rebar 4 Hun 12 mm ribbed surface SD30
ข้ออ้อย 12 มม (เหลือง)
199
295
183
Steel
Weighted Avg Change
-9%
Cement 50 KG Bag Portland In See Phet (Diamond)
อินทรีเพชร
130
150
139
Cement 50 KG Bag Nok In See Daeng (Red)
อินทรีแดง
115
127
127
Cement
Weighted Avg. Price Increase
15%
Cement prices are still up on the year but steel prices are significantly down. The trend is that price deflation is starting to filter into the market in other goods but it will be a slow process. Certainly building today would cost a lot less as far as materials than just a few months ago, probably close to the cost at the beginning of the year.
Tags: prices of building materials, steel prices, Thai inflation