THE HARDWARE Merchants' Association (HMA) says it is seriously concerned about the continuous upward movement in prices over the past few months.
The merchants met in an emergency meeting recently to assess the situation, it said in a release.
The background information as presented by the largest importer of steel to the island, Tankweld Metals, said the HMA, indicates that prices are being pushed by high demand worldwide, China's demand being a case in point.
CHINA'S HIGH DEMAND
China's high demand has in turn caused a shortage in freight facilities resulting in higher transportation rates.
When this demand supply factor is coupled with the weakening of the US dollar against the euro, the pricing mechanism for steel is affected significantly.
"The unstable situation in the steel market has hardware merchants in a tailspin as consumers have reacted to the instability by displaying a resistance to the price increases by putting projects on hold, understandably, as the building industry cannot make firm quotes in light of the continuing escalation," the HMA said.
"Not only has steel prices been spiralling increasingly upward, but plywood and lumber has also registered massive increases in recent months."
The association adds that the rising plywood prices seem to be a reaction to currency exchange rates while lumber has become more expensive due to major supplier, the United States, using a new and more expensive chemical to treat the product.
"Hardware merchants contend that the situation with steel, lumber and plywood has so affected the building industry that projects have been put on hold, threatening allied industries," said the release.
The HMA has further reported that so far two major corporations have approached them to establish a partnership for bulk purchasing in an attempt to mitigate the problems and provide price/cost benefits to the industry.
The HMA Executive will continue monitoring the situation in light of the current world trends and "is giving serious consideration" to the proposal.
