The consumption of building materials in the domestic market at present is just 30 to 50 percent of production, although peak time for construction is approaching.

Chairman of Vietnam Building Materials Association, Tran Van Huynh said that consumption saw a slight increase compared to the same period in previous years, when Vietnam's real estate was gloomy because of high inventories.

He said that this year was still a difficult time for building material producers because the domestic real estate market was just warming up.

Increased production costs had also pushed up prices of building materials, he said.

"This leads to a modest consumption of building materials despite the fact that this was considered peak time for construction," he said.

However, he said, the consumption of cement was quite high, almost 80 percent of production, thanks to the export promotion policy.

Owner of a steel and iron store in Hanoi's De La Thanh Street, Nguyen Ngoc Anh, said that prices of steel and iron had increased 5-10 percent due to increased transport and warehouse costs.

"My sale has been five percent higher than that of the last few months," she said.

Director General of Thach Ban Group Joint Stocks Company – a brick producer, Nguyen The Cuong said that input costs of electricity, fuel and transport had increased, which made it difficult for firms.

Cuong said that the situation was not too bright in the near future.

"It's time for firms to think further about restructuring their production and renovating technologies," he said.

A representative from a steel company said that the health of the housing market directly affected the consumption of all building materials, including steel.

Moreover, domestic steel companies faced a major difficulty that related to the import of steel containing boron.

Overseas exporters mixed a little concentration of boron to the steel before exporting to Vietnam so that they could avoid paying import tax.

The representative said that a little concentration of boron could not change the physical characteristic of steel, but the action was a kind of trade fraud to evade taxes.

The imported products were then sold as rolled construction steel, while authentic construction steel is subject to a 10 percent import tariff.-VNA