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By Katrina Mennen A. Valdez, Reporter
The Filipino Galvanizers Institute, Inc. on
Tuesday said it is poised to increase the prices of steel products
by a half within this month.
The announcement was triggered by the spikes in
the prices of steel products in the world market, which hit their
highest levels in the last few weeks and continue to go up sharply.
Salvio Perez, president of the Filipino
Galvanizers Institute, Inc., said the group intends to further raise
prices up to 50 percent before the month ends, following its
implementation of a 35-percent increase in their respective
products.
Perez said steel manufacturers are gravely
affected by the increases in material costs, escalating fuel and
power prices and the deterioration of the peso-dollar exchange rate.
“These factors have aggravated the situation
and this is seriously threatening the viability of the entire
industry,” Perez said.
He said that billets and steel bars have already
increased by 50 percent, while other products have started
increasing on April.
Based on the monitoring of the Department of
Trade and Industry, corrugated GI sheets now fetch P55 per foot for
APO G26 and P28 for Galvalum.
Steel bars now fetch P190 per piece for those
with 10-millimeter thickness and P280 for 12 mm.
In a related matter, the steep increase in the
price of steel was caused mainly by the rise in the cost of iron
ore, the basic raw material in steelmaking. In April this year, one
of the world’s biggest mining company Brazil’s Cia Vale Rio Doce
gained a 71-percent price increase for its annual iron ore contracts
with China.
This was followed by other major mining
companies such as Rio Tinto and BHP Billiton of Australia. The steel
mills claim that higher steel prices are not enough to cover gains
in raw materials costs.
Industry experts believe global steel prices
will continue to soar as the cost of steel making including iron
ore, coking coal and scrap have rocketed.
Consequently, the prices of steel materials like
slabs, billets, hot rolled coils (HRC), and cold rolled coils (CRC)
have risen by more than 100 percent compared with the December 2007
prices.
Slabs and billets are priced from $950 to $980
per metric ton while HRC is currently above $1,000 per metric ton
and CRC at over $1,300 per metric ton.
Moreover, supply from major steel producing
countries such as Japan, South Korea, Australia, Taiwan, India and
even China have been very tight because of their growing domestic
demand.
As a result of these price movements in the
steel materials, which are largely imported by domestic producers,
local prices for construction materials such as reinforcing bars,
sheets and other brand of steel based materials have increased
likewise by as much as 50 percent.
The manufacturers are concerned also because
before they can recover the increases in material costs, escalating
fuel and power prices and the deterioration of the peso-dollar
exchange rate, have aggravated their situation and this is seriously
threatening their viability.
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