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All building materials go dear in the State
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The spiralling prices of steel and cement are making life difficult for those planning constructions.
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Too stiff for comfort: The rise in the price of steel has burdened the building industry.
The building industry will have little solace from what appeared to be a fire-fighting exercise by the Union government at the start of April to curb the price of steel. The spiralling prices of steel and cement have put an unprecedented burden on the building industry as a whole in Kerala where the cost of other inputs has gone up in tandem.
The week ends with the news that major producers decided to raise the price of steel by Rs. 5,000 a tonne. The higher price has been described as “raw material surcharge.”
The price increase has come in response to what the steel industry foresees as a raise in the price of iron ore by the government-owned NMDC (National Mineral Development Corporation) Ltd.
According to news reports on Thursday, the net effect on a steel retail buyer will be Rs. 5,700 a tonne, including 14 per cent excise duty.
The Union Ministry for Steel appears helpless as the government-owned SAIL (Steel Authority of India Ltd.) alone cannot make a big impact on the market. Reports cited Union Minister for Steel Ram Vilas Paswan as saying that his Ministry had recommended the removal of the 14 per cent countervailing duty on import of TMT bars and a 15 per cent export tax on iron ore.
The price hike came hardly a week after the Union government talked the country’s primary steel-makers into rolling back the prices of both long products and galvanised corrugated steel.
At local retail outlets, even non-ISI steel bars are being sold at Rs. 48 a kg, while the price of locally produced ISI-mark TMT bars vary between Rs. 48.90 and Rs. 49. The prices of brands such as Tata and Vizag too have ruled high. And, a local retailer says, the prices are likely to move up further.
Cement prices too threaten to breach old price levels. The situation has been made worse by a shortage that is yet to spiral into a crisis. Dealers expect the situation to be cleared within this week.
The average wholesale price of cement (50-kg bags) currently is between Rs. 256 and 268, says a dealer in the city. The price generally goes up by Rs. 10 a bag at the retail level.
The Centre for Monitoring Indian Economy reported in mid-March that cement prices will remain firm owing to rising demand. Between April 2007 and January 2008, demand for cement grew at 9.5 per cent as against the 9.9 per cent during the corresponding period in the previous year.
A retailer in the city says cement prices saw minor variations during the past three weeks.
Cement imported from Pakistan had not much of an effect on the market as the quantity arriving was not significant.
Imported cement costs Rs. 235 a 50-kg polythene bag.
In both the cases of steel and cement, efforts by the government to curb prices are unlikely to have any discernible effect as the inflationary trend continues.
The prices of major inputs such as cement and steel have had its reflections on the cost of other building industry inputs, such as gravel, quarry and river sands, granite and metal.
Add to this the severe shortage of workers and the building industry is going through hard times.
K.A. MARTIN
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