Analysis on Factors to Cause the Price Change of Building Materials

Transcription

1 Advanced Materials Research Online: ISSN: , Vol. 683, pp doi: / Trans Tech Publications, Switzerland Analysis on Factors to Cause the Price Change of Building Materials ZHOU Huan 1,a, ZHAO Jianhua 2,b 1 College of Hydraulic & Environmental Engineering, China Three Gorges University No.8, Daxue Rd, Yichang, Hubei Province, P.R.China 2 College of Economics & Management, China Three Gorges University No.8, Daxue Rd, Yichang, Hubei Province, P.R.China b butterfly_zjh@yahoo.com.cn Key words: building materials; price change; factor analyses Abstract. Building material cost accounts for about 65% of the engineering cost, and some even reach more than 75% in the current formation of the construction installation engineering cost in our country, so the price of materials determines the engineering cost to a great extent. It is essential for proprietor to master the price fluctuations of building materials to control engineering cost, and it is also important for contractor to determine the bid price. According to the market price theory and the basic characteristic of the building materials, this paper analyses and summarizes the influencing factors of building materials price changes, and provides some reference basis for the parties of building to give a investment decision and control cost. Introduction In the international financial crisis, building materials price, especially iron and steel prices continued to rise. Beijing, Shanghai and Guangdong area steel price rise reached 60%, In the meantime, the other major building materials prices also appeared to rise sharply. The abnormal fluctuations of building materials price is beyond the reasonable judgment of the whole society. The cost variation of many projects is to the contract one third of the total cost because of the abnormal fluctuations of building materials prices. Construction enterprises are facing the huge risk of loss. So what is causing building materials price changes so big, it is a worth thinking research. Building materials is the material base of the construction project. It determines the building strong, durable, suitable, economy and beautiful. It is necessary to study various material raw material, composition, structure and characteristics. Building material cost accounts for about 65% of the engineering cost in the current formation of the construction installation engineering cost, and the proportion has a rising trend. These data show that materials is in a obviously dominant position in the fabrication of engineering cost, Therefore, it is especially important to grasp the building materials price information accurately. The basic content of building materials and their properties The generalized building materials is to point to used to build buildings and structures of all materials, including raw materials, semi-finished products and finished products[1]. Special building material is refers to the direct constitute buildings and structures of the entity material. This paper referring to building materials is the concept of narrow sense. Building materials should satisfy the three basic requirements at the same time: firstly, the building materials must meet some technical performance requirements of the building or structure itself to ensure the normal use; secondly, the building materials must resist the erosion of surroundings and harmful medium in use All rights reserved. No part of contents of this paper may be reproduced or transmitted in any form or by any means without the written permission of Trans Tech Publications, (ID: , Pennsylvania State University, University Park, USA-10/05/16,05:01:28)

2 Advanced Materials Research Vol to ensure a building or structure durable; thirdly, the building materials must not give a threat to the safety and healthy of the user. For example, based on clean production method, the state encourages use the building materials that are formatted by certain waste reuse, but it are not necessarily to conform to the consumer rights and interests protection. Building materials is of various kinds, and its properties varied, it can generally be divided into: physical properties, mechanical properties, chemical properties, durability, etc. The materials in different parts of a building are affected by a variety of different external factors effect. Some building materials also have additional properties except for those basic properties which are to realize building function, for example, some coating can release formaldehyde which is harmful to human. Additional properties make material use restricted, and then affect the market price. In order to better analysis and determine the factors of building materials price changes, it is necessary to understand the main properties of building materials and master the material quality evaluation index. Then the builder will have a reasonable choice in using materials, doing the benefit and avoiding its harm. Building materials market price system According to System Resource Constraint Theory, the price of materials depends on the resource constraint and market constraint. More resource constraint, less supplies; less market constraint, more demands; the double constraints influence the price of the materials. The socialist market economic system is an organic whole held together by Commodity Exchange, there are a variety of prices in the exchange process, including factor price, goods price and labor price. Price categories are complex because of the types, variety, scale, quality of the factor goods and labor. These prices appear to be isolated, disorder at first glance, but in a carefully consideration, they are mutually link, interacting, and it become an organic whole one [2]. The whole price first divided into two categories from the market price system point of view, the first is factor price system, and the second is goods and services price system. Influence building materials price factors The level change of commodity price is subject to the objective economic conditions change and the goods itself condition changes. The macro economic condition change is refers to the relation between market supply and demand change, the change of monetary value, etc. In conclusion analysis, there are six Influence factors about building materials prices. The value of building materials. The value of the goods determines its price. Value is the basis of the price; the price is the monetary form of the value. At present, the construction market is more active, and building materials variety, at the mean time the sources is wide and price changes quickly, so it is particularly important to choose the source of all kinds of building materials and its raw material source. Different kinds of building materials have fixed manufacturer and sales market, so its price represents the main product's price trend. It is important to determine the source of building materials. Large-scale professional manufacturers and state-operated distribution department are good choices. Because they have good reputation and quality guarantee, and their prices are reasonable. Supply-demand relationship. Supply and demand relation influences commodity price, and it is the basic theory of Marxist economics. When supply exceeds demand, the price fall; when demand exceeds supply, prices rise. This is the eternal law of commodity economy, and building materials nature also is not an exception. There are many factors which influence the supply and demand relation, such as time, regional, climate, production conditions, religious belief, etc. In 2009,

3 670 Advanced Materials and Engineering Materials II financial crisis was aggravating and economic downturn was sustained. But the building materials industry will go ahead with a contrarian. Victims desperately want to live in a building, the domestic demand, transportation and housing is increasing. It is said that building materials prices is expected to go higher next year. National macro policy. In 2011, national macro policy determined the "adjustable structure, control inflation, promote transformation, benefit the people's livelihood overall fundamental key, and issued a series of macroeconomic regulation and control policy on land, financing etc [3]. The real estate, as an important pillar industry of the national economy, involves construction, land, finance, raw materials, and other areas of the economy and industry. Construction enterprises must be affected by the influence of the real estate regulation policy. Although state macro-control restrict the real estate industry, which makes the prices of the steel, cement and other raw materials prices down, due to the steel, cement etc. production enterprise's further standardize, raw material supply still tightens, which make the price of raw materials slow down and the price index still in a high operation. The value of money. Purchasing power parity theory proposed by Sam Cassell pointed that, the exchange rate between the two countries depends on the contrast relationship of the two countries purchasing power. In the floating exchange rate system, the exchange rate changes should reflect the change of currency relative purchasing power parity between the two countries. One country currency appreciation depends on the country's central bank for the currency gold content adjustment and on the currency demand of the international market. In the whole year of 2010, China's whole society construction sector was trillion yuan, up by 12.6% over the previous year. In 2011, China's construction industry maintained a steady growth trend; realize total output value 11.8 trillion yuan, a year-on-year increase of 22.6%. In the first half of 2012, China's construction industry output growth began to fall. In this background conditions, the construction industry development fervent, which lead to the building materials price change greatly? Notes circulation. Too much paper money leads to inflation and too little leads to the deflation. Inflation or deflation directly affect price. The price rise because of the inflation, which makes the price signal distortion. And it is easy to make producers go astray production and Lead to the blind development of production. Just like the increasing house prices in our country, there are more and more investors to building industry. So the prices of the building materials still keep high. It explains that the notes circulation has influence on the price of building materials. The influence of the international market. China's economy has been closely linked to the global economy together. All kinds of commodity prices gradually let go, and the building materials market prices have let go. No matter the owner or contractor, ensure the quality of projects, at the same time, they pay much attention on price of the building products. Determine the engineering material price is beneficial to increase investment returns [4]. Just for steel, the price of steel in our country has been influenced by the international iron ore price agreement. The international iron ore price fluctuations will result in the steel market price rise and drop in our country. Suggestions and measures Stress the control of bidding documents to the building materials price. In the tender documents, there should be a sure way to fully set building materials price and to realize fully the competition of market price through the effective way. It is necessary for the main material to clear quality level. There are at least t three equivalent grade brands in the bidding documents, and the bidder chooses one or other equivalent grade brand to make offers. For the main materials, the bidder must fill the main material price list individually.

4 Advanced Materials Research Vol Establish building materials information management. Collect the price situation of building materials from different sources, different Angle, and make the information processing, sorting and storage, then establish and improve the material information management system [5]. It is necessary to timely understand and master the material market and to have a process control for the material cost; especially it should be controlled from the source. Perfect building materials price control system. According to statistics, main material value 68% around in the materials cost, and auxiliary materials, secondary materials, revolving materials account for only 32% of the cost. The materials with large quantity and high value must have an open and fair way to be purchased by invitation to bid. The materials with little quantity and low value must be purchased by comparative prices or bids. Set up purchasing organization. Establish suitable purchasing organization system. It must have a collective research and scientific decision for major procurement matters. The materials must be purchased by open tender. Purchasing work should be planned as a whole with a reasonable purchasing cost. Summary Along with the gradually development of our country construction market, the construction become the pillar of the national economy industry. Building material is the material foundation in building production activities, just like architectural design, building structure, construction and building economy, and it is the important part of building engineering discipline. Building materials price change has a great influence on the project, so it is necessary to control the influence factors. The factors of building materials price influenced are very complex and its number is large. So remind all investors accurate carding these key factors, and master all kinds of building materials price information, then have more accurate prediction on construction market development and building material price change. And then reduce the risk and increase income. References [1] LI Yajie. Building materials [M]. Beijing: China Water Power Press [2] YAO Jinguan, LI Jianping. Market price studies [M]. Beijing: China Prices Press [3] ZHANG Hongbin, XU Jiantao, ZHANG Qiong. Economic fluctuation and building materials price correlation analysis [J]. Water science and technology and economic (17-3). [4] XU Lili. Building materials prices in the industry trend influence and [J]. Science and technology intelligence development and economy (15-10). [5] CHEN Yancun. China construction structure of the present situation, problems and adjust way [D]; Xiamen University

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