According to Salvio D. Perez, president of the FGI, prices of galvanized steel products need to be increased due to the steep rise in the cost of raw materials and other production inputs such as energy.
Perez explained that the galvanizers tried their best to operate at tight margins.
Unfortunately, Perez admitted "we cannot absorb this cost increases for too long."
The FGI, Perez said, is warning the public about the pending price increase because "FGI owes it to the consuming public to be advised on this development."
Perez projects that the prices of intermediate products such as slabs, hot rolled coils and cold rolled coils would further move up in the coming months.
Integrated steel mills, which supply these materials, had announced a seven to 10 percent increase in prices in the second quarter due to the higher cost of iron ore and coking coal.
Recently, major suppliers of iron ore from Australia such as BHP Billiton and Rio Tinto raised their prices for one year supply of iron ore to major Asian integrated steel mills of Japan, Korea, China and Taiwan by an unprecedented 71.5 percent.
Japan, Korea, China and Taiwan are the main sources of flat steel raw materials that are imported to manufacture G.I. sheets.
The price of coking coal, which is used in steel smelting, has risen 150 percent due to scarcity.
Furthermore, major steel suppliers such as POSCO of Korea and JFE of Japan have shut down their blast furnace starting March for scheduled maintenance, further reducing the already limited steel materials in the market.
Earlier, government had warned of a possible eight to 16 centavos increase in the prices of local canned goods due to the five percent increase in the prices of food-grade tin cans.
According to Trade Assistant Secretary for Consumer Welfare Norman R. Hocson, the projected five percent increase in the prices of food-grade tin cans will redound to an eight to 16 centavos increase in the prices of canned goods.
Tin Can Manufacturers Association of the Philippines (TCMAP) president Henry Tanedo calculates the increase at seven centavos per canned goods.
In fact, Tanedo admitted, tin can manufacturers had already implemented a five percent increase in the prices of tin cans and will have to implement another five percent due to increased global demand especially by China.
The Philippines’ annual demand for tin cans is 240,000 metric tons.
Tin plates constitute about 20 percent to 40 percent of the cost component in the manufacture of canned products such as sardines, corned beef and processed milk.
Prices of tin plates used in tin can packaging have been going up to about $1,100 per metric ton for prime tin plate.