Hai, an engineer with a construction company in Hanoi, has changed his cost estimates for a project three times in the past week after steel prices began skyrocketing since earlier this month.

"Our project has seen profit turned to loss as steel prices have surged by 40-50 percent since the beginning of the year. A steel producer has raised its quotations six times in the first 10 days of April."

Steel costs typically account for 10-30 percent of a construction project, so major fluctuations in its prices pose major challenges to contractors.

"Contractors compete with each other with minimum costs, and each time steel prices rise, our losses mount," said Quang Trung, deputy director of Long Giang Foundation, a Hanoi-based construction company.

The company has turned down two contracts so far this year because the rising steel prices would inflict losses.

Ngoc, CEO of another construction company, said they would surely report losses this year as signed contracts do not allow increases in material prices. Future prices are set to rise by 20-30 percent, he added.

The company is spending big bucks to stockpile steel in case prices continue to rise, but even this is a challenge as steel producers report limited stock and request pre-orders of up to a week. Even then, there is no guarantee that all orders will be fulfilled.

Industry insiders say that the rising demand for steel, globally in general and China in particular, is pushing prices up. China last year imported 38.56 million tons, up 150 percent from 2019.

Iron ore prices have risen 55 percent so far this year to over $170 per ton, while that hot rolled coil steel have surged 44 percent year-on-year to $660 per ton.

Vietnam’s steel production volume in the first quarter surged nearly 34 percent year-on-year to 7.7 million tons, with export volume rising nearly 60 percent to 1.6 million tons.