Government to study Global Steel's failure to supply raw materials for GI sheets

MANILA, Philippines - The government will study the operations of Indian firm Global Steel Philippines after it failed to provide the domestic market enough supply of hot rolled coils (HRC) and cold rolled coils (CRC) – vital raw materials for the manufacture of galvanized iron sheets (GI sheets).

The inability of Global Steel to supply the local market has nearly caused the increase in steel prices. It was however delayed after the government decided to lift the seven percent tariff on imported CRC and HRC. The executive order (EO) removing the tariff will be in place once President Arroyo signs it.

“The company has many problems. We have to study the feasibility of their (Global Steel) operations,” Trade Secretary Jesli A. Lapus told reporters. “We even have reports that they cannot pay their electricity bills.”

According to Lapus, GI sheet makers approached them saying that their inventory is only good for two weeks. If they cannot avail of cheaper CRC and HRC, then the price will go up and their entire inventory until year end will be affected.

“Time is of the essence. This is of national concern,” Lapus said on the implementation of the EO that removes the tariff.

“The government cannot protect a company that is not commercially operating. What can we do,” Lapus asked. “We have to decide for the common good.”

At the same time, Lapus said they expect Global Steel to appeal the decision of the government and maybe use this as an excuse to delay the implementation of the EO, but Lapus said they are determined to do what is best for local consumers.

The removal of the sevent percent tariff on CRC and HRC has offset the planned increases in the price of steel in the market but it does not guarantee that there will be no more increases in steel prices should world prices go up.

Earlier, Trade Undersecretary for Consumer Welfare Zenaida C. Maglaya said that the move of the government to remove the tariff has allowed steel producers to delay their plan to increase their price by three percent.

However, she cautioned that any more increases in the world market prices may cause local prices to go up. Steel prices are determined quarterly.