As the construction and ready-mixed concrete industries continue to conflict over ready-mixed concrete prices in the metropolitan area for four months, industry attention is focused on whether a consensus can be reached at the 10th negotiation table.
According to the construction and ready-mixed concrete industries, a meeting between the Korea Construction Materials Industry Association (KCMIA) and the Yongwoo Association, a practical meeting for ready-mixed concrete manufacturers in the metropolitan area, is scheduled for 2 p.m. on the 6th at the headquarters of Lotte Engineering & Construction in Seocho-gu, Seoul.
The KCMIA and Yongwoo Association did not reach an agreement on ready-mixed concrete price adjustments at the 9th negotiation held on Jan. 24. The KCMIA proposed a price of 90,400 won per cubic meter, which is 3,300 won lower than the previous price of 93,700 won. On the other hand, the Yongwoo Association insisted on 93,000 won, which is 700 won lower, leading to the negotiation breakdown.
The construction industry initially argued that price reductions were necessary for cement rather than ready-mixed concrete. This was because the seven domestic cement companies raised the price of cement to 112,000 won per ton, an increase of about 7%, citing rising prices of bituminous coal, one of the manufacturing materials, at the end of 2023.
However, as the price of bituminous coal has been falling since early last year, the construction industry pointed out that cement prices should be lowered. In response, the cement industry argued that large-scale investments are necessary to achieve the government's carbon neutrality goals, and therefore, cement prices could not be reduced.
Subsequently, the construction industry revised its strategy to lower ready-mixed concrete prices, which is made from cement aggregates. It is expected that the construction industry will argue at the 10th negotiation that ready-mixed concrete prices should be lowered due to falling raw material prices and the downturn in the construction market. On the other hand, the ready-mixed concrete industry is likely to assert that rising labor and transportation costs make it difficult to lower prices.
A representative from the ready-mixed concrete industry noted, "It is unreasonable to place the entire burden of cement price increases on the ready-mixed concrete industry," adding, "Not only electricity rates but also labor and transportation costs have risen, so a reduction in ready-mixed concrete prices would be too damaging."
If this 10th negotiation fails, concerns have been raised that difficulties in the supply and demand of ready-mixed concrete may lead to side effects such as delays in construction timelines and increases in construction costs.