Asphalt Concrete Prices Surge, Construction Industry on High Alert

The construction industry is facing significant hardship due to soaring raw material prices, with asphalt concrete (ascon) costs nearly doubling amid supply problems for building materials derived from oil, stemming from instability in the Middle East. The price of asphalt, a primary raw material for ascon, has approximately doubled to 1,200-1,300 won per kilogram this month from around 700 won in February, accounting for about half of ascon's production cost. Prices for finishing materials using naphtha, extracted from crude oil and used in paints, insulation, and waterproofing, have also risen by at least 50% in the past two months, exacerbating difficulties at construction sites. The sharp increase in ascon prices has resulted in the temporary suspension of road repair projects by local governments across the country.

Supply disruptions for crude oil-derived construction materials have occurred as a consequence of the US-Iran conflict.

The government is working to find solutions whenever major material shortages arise. Following the resolution of issues with concrete admixtures through discussions with Lotte Chemical, the government has now formed an 'Emergency Economic Task Force (TF) for Construction Sites,' led by the Vice Minister of Land, Infrastructure and Transport, to manage demand based on construction urgency and pursue institutional improvements to address the current ascon supply problem.