Costly industrial raw materials seen to hamper growth

The rising prices of basic industrial raw materials may hamper economic growth this year, industrialist Raul T. Concepcion and Cathay Pacific Steel Corp. chairman John K.C. Ng said yesterday.

According to Concepcion and Ng, world prices of industrial raw materials such as aluminum, steel, copper, resins and plastics have been rising due to the increasing fear of a war between the US and Iraq.

Concepcion warned that prices of consumer goods will be greatly affected by the rise in the prices of industrial raw materials.

He said that because of the impending war between the US and Iraq, the global economy is virtually on a standstill.

"If the economic standstill lasts more than two months, the growth prospects this year would become dimmer," he said.

Ng, for his part, confirmed that steel and plastic prices could easily double if war erupts in Iraq.

"Prices of slabs have risen by 30 percent in the last two months due to scarce supply from Russia and Ukraine," Ng said.

Plastic resin prices have also risen by 20 percent with polyethylene now costing $660 per metric tons from only $550/MT in December.

Polypropylene prices, on the other hand, have increased by as much as 51 percent to $800 to $830 million/MT from $550/MT.

Concepcion, cautioned government about making any pronouncements that could further upset the already tense global situation.

"The business community is hoping that war can be averted between the US and Iraq and that a peaceful resolution is reached so that the global economy can move on," Concepcion said.