Constructionsteel prices likely to fall

The price of construction raw materials is expected to sta¬bilise in the second half, with steel dropping nearly 3 per cent but cement rising 510 per cent.

Construction experts yesterday told a seminar entitled "PropertyMarket Trends in Hard Economic Times", held to celebrate this month's fourth anniversary of the Real Estate Information Centre (REIC), that sev¬eral economic factors, such as oil prices, inflation and consumers' purchas¬ing power, were expected to improve in the second half. Construction raw materials are expect¬ed to remain on a par with the same period last year.

Staporn Phettongkam, secre¬tarygeneral for cor¬porate communica¬tions at Siam City Cement, said although domestic demand for cement in the first half had dropped 5.6 per cent year on year, the cement price was expected to rise 510 per cent in the second half. This is because higher production costs have made cement producers reduce their pro¬duction capacity, which in turn will force cement producers to raise prices.

The Thai Cement Manufacturers Association estimates this year's cement production will be 42.3 mil¬lion tonnes, down 7.84 per cent from 45.9 million tonnes last year. Of that, 26.8 million tonnes will be used in the domestic market, down from 27.7 million tonnes last year. The rest will be exported.

Meanwhile, the price of steel is expected to decrease 35 per cent fol¬lowing reduced demand by China after the end of the Beijing Olympics, said Wikrom Vajragupta, managing director of the Iron and Steel Institute of Thailand.

Steel earlier increased to a record high of Bt40 a kilo¬gram but has since dropped 17.5 per cent to Bt33.

REIC directorgeneral Samma Kitsin told the seminar hous¬ing prices would remain at nearly the same level as in the first half, thanks to the expected stabilisation of prices of construc¬tion raw materials.

Noppadol Buranathanung, divi¬sion executive for supplyside eco¬nomic analysis at the Monetary Policy Group of the Bank of Thailand (BOT), said the central bank believes inflation in the Kingdom will improve in the second half, thanks to a reduc¬tion in the oil price. The BOT predicts inflation of 7.58.8 per cent and eco¬nomic growth of 4.85.8 per cent.

"We believe the BOT can still man¬age inflation successfully through monetary policy," he said.