War: Sharp Rise in Polymer, Electrical Material Prices Worries Construction Sector
Market data shows that prices of polymer products have risen sharply within a short period
TIRUPATI: A sharp rise in prices of polymer raw materials and electrical components is creating uncertainty in the construction sector. Traders warn that a continuation of this trend could slow down construction activity and that this would have a ripple effect on related sectors.
The increase is linked to the war-linked global market volatility that has disrupted petrochemical supply chains and tightened raw material availability. However, a suspicion is that big trade is unjustifiably jacking up the prices in the name of a war.
Market data shows that prices of polymer products have risen sharply within a short period.
According to market information, PP prices rose by about `35,000 per MT and PE by around `33,500 per MT within the last nine days.
On March 1, PP domestic prices rose by `2,000 per MT, while HDPE and LLD increased by `2,500. On March 3, PP domestic and deemed export prices rose by `6,000 per MT, with HDPE and LLDPE also increasing by `6,000. On March 6, prices of PP, HDPE and LLDPE went up by about `15,000 per MT.
Another revision on March 9 pushed HDPE and LLDPE prices up by `10,000 per MT and PP by `12,000. Overall, since March 1, PP prices have risen by about `35,000 per MT, HDPE and LLDPE by around `33,500 per MT, and LDPE by `25,000 to `28,500 per MT depending on the grade.
Traders said the surge in polymer prices is affecting PVC manufacturing units and construction activities. Prices of copper wires and other electrical materials have increased by about 20 per cent, further raising the cost of house construction and infrastructure works.
Supply concerns have also emerged from Gujarat’s Morbi region, where several tile manufacturing units have reportedly shut down due to gas shortage, which could reduce tile availability and push prices higher.
“Prices of PVC, steel, transportation and other construction materials have been rising and creating uncertainty in the market. Several companies manufacturing pump sets, motors, HD pipes and PVC have stopped accepting new orders as they are unable to estimate production costs amid the continuing rise in raw material prices”, said Manjunath, president of Tirupati Chamber of Commerce.
He said the rising material costs are increasing construction expenses and forcing builders and contractors to review project costs. “If the situation continues, it could affect the real estate and construction sectors and also reduce GST and other tax revenues for the state and central governments”, Manjunath noted.
The TCC has urged the Centre to control the raw material prices and restore gas supply to Morbi tile manufacturing units to resume their production. It also pleaded with the government to order an inquiry into the sharp rise, and monitor the prices of raw materials, reduce transportation costs, and protect the construction sector that supports lakhs of workers and small businesses.
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Points:
- Traders claim global market volatility and geopolitical conflicts disrupt petrochemical supply chains
- PP prices rose by about `35,000 per MT within nine days in March
- HDPE and LLDPE prices increase by around ?33,500 per MT
- Copper wires and other electrical materials record about 20% price increase
- Gas shortage shuts several tile manufacturing units in Morbi, raising supply concerns
