Construction Project Schedules to Be Adjusted to Stabilize Material Prices

As construction material prices rise and supply chains become unstable due to the tense situation in the Middle East, the Ministry of Land, Infrastructure and Transport (MOLIT) has decided to adjust the timing for ordering non-urgent construction projects and share more information with private construction companies. This action comes after disruptions occurred in related construction projects due to soaring prices and difficulties in securing certain materials such as insulation, waterproofing, sealants, and asphalt concrete, reportedly influenced by the Middle East situation. Anxiety persists that material supply and demand will become more challenging in May.

Asphalt concrete prices have increased by 20-30%, and additives for ready-mixed concrete have risen by up to 30%. Insulation material prices have surged by up to 40%, and adhesive prices have increased by 30-50%. Rebar unit prices have risen by approximately 8%.

MOLIT will adjust the ordering schedule for non-urgent construction projects and, in coordination with local governments and the Public Procurement Service, will implement focused responses for sites directly related to public safety and livelihoods, such as roads requiring urgent maintenance ahead of the rainy season and apartment complexes nearing their move-in dates. MOLIT plans to minimize market confusion by sharing supply chain information with the private sector and will cooperate with relevant ministries to address market disruption activities like collusion and hoarding.

MOLIT will consult with the industry to simplify import procedures for raw material price stabilization and alleviate import costs. For items that have a low proportion in construction costs but cause supply disruptions due to unit prices not being reflected, MOLIT will swiftly incorporate them into public construction unit prices to resolve supply issues. MOLIT is pursuing consultations with the industry and relevant ministries to simplify import procedures for raw materials in the construction material sector, such as basic oils, and to mitigate import costs. It is also considering support programs to diversify the construction material supply chain. Contractual and financial support related to construction periods and costs due to material supply disruptions will continue to be provided.