Romanian Construction Prices Up 30% in 2008, On Higher Labor, Materials Costs – Employers

"No one regulates prices for reinforced concrete and cement. There is a monopoly,” Ieftime added.

The evolution of cement and reinforced concrete prices might lead soem construction companies to bankruptcy or might get them to abandon some of their projects. The number of litigations between beneficiaries and contractors will increase unless they renegotiate contracts.

"In a correct beneficiary-contractor relationship prices should be updated," Iftime said, adding construction costs reach at least EUR800/square meter.

Reinforced concrete sales, which generally account for 40% to 60% of the total volume in a construction work, will rise this year by 10-12%, up to 1.45 million tons, from 1.3 million tons in 2007, according to the data announced end February by the Romanian Association of Metal Distributors.

The average producer price for reinforced concrete was EUR460 – 470 per ton in 2007, and reached EUR490 per ton in February this year, the association said.

Romania’s Holcim, part of the Swiss group Holcim and one of the main cement producers, hiked cement prices by 10-12% since the beginning of the year. Markus Wirth, the head of the company, said last week that producer sale prices are not the same with market prices, as some dealers perceive higher prices in areas with higher demand.

The Romanain cement market, dominated by three of the largest global producers, German HeidlebergCement, French Lafarge and Swiss Holcim, might see a 20% increase, to nearly 12 million tons, of which imports will account for 300,000 to 500,000 tons.