The pace of infrastructure development typically accelerates in the country with the end of the festive season. However, this year, cement producers have collectively raised cement prices, which construction entrepreneurs fear will negatively affect the sector.

Ramesh Sharma, the chairman of Sharma & Company, who is among the contractors yet to receive payments amounting to approximately Rs 1 billion for projects from fiscal year 2023/24 , claimed that a "syndicate" is behind the price hike in cement. He urged the government to take immediate action against this collusion, warning that if left unchecked, rebar manufacturers might also increase their prices.

"Cement prices have risen abnormally, and if the government does not intervene, rebar producers might follow suit," Sharma stated. He highlighted that while rebar prices have remained stable, cement prices have surged significantly, with Ordinary Portland Cement (OPC) now costing up to Rs 630 per 50kg bag, compared to Rs 440-450 just at the beginning of the month. This represents a price increase of Rs 150 per bag within a short span.

Sharma accused cement producers of reducing production to justify the price hike, a practice he described as a cartel. He lamented the government’s apathy, saying, "The government neither ensures timely payment for completed projects nor addresses unreasonable price hikes in the market, leaving the construction sector demotivated."

Meanwhile, Raghunandan Maru, chairman of the Nepal Cement Producers Association, attributed the price hike to increased demand during the construction season. He claimed that many cement producers had previously been selling at a loss and are now adjusting prices to cover their costs.

Despite the price surge in cement, some rebar manufacturers have refrained from increasing prices significantly. Ujjwal Kumar Shrestha, executive director of Panchakanya Group, noted that while rebar prices have risen marginally by Rs 2 per kg, his company follows a consistent pricing policy, unaffected by competitors’ fluctuations.

According to Shrestha, annual rebar consumption, which averaged 1.2-1.4 million tonnes before the COVID-19 pandemic, has been steadily declining. It dropped to 1.1 million tonnes in 2021, 1 million tonnes in 2022, and 900, 000 tonnes in 2023. The outlook for 2024 remains uncertain.

Shrestha also highlighted the challenges in the rebar market, including low demand and delayed payments. While Panchakanya Steel currently sells rebar at Rs 94 per kg, the price fluctuates between Rs 72 and Rs 80 depending on market conditions.

Hari Neupane, chairman of Ambe Group, which produces Ambe Steel, confirmed that there are no immediate plans to raise rebar prices due to sluggish demand and slow recovery. "Previously, steel sold at Rs 95 per kg, but now it struggles to sell at Rs 80," Neupane explained. He added that the government’s inability to invest in development and the slowdown in residential construction have further weakened the market.

With only 24-25 out of 31 steel and rebar manufacturing companies currently operational, the construction industry remains under pressure. Despite a slight increase in activity this month, overall market demand is far from promising, leaving industry stakeholders concerned about the future.