Mate I run steel plants in the region. If raw materials keep increasing so does the price a consumer has to pay for the end product. There is a limit to what the consumer can tolerate. Even governments need to work within budgets and inflated prices are as problematic as deflationary. We already see the impact on the steel demand decrease by the retail consumer. Government projects are being delayed as budgets are being blown out and steel companies cannot fulfil past orders as prices are moving too fast.
I'll give u an example- 5 months ago we ordered strip of hrc for 634 ysd per ton. 3 months later they cited u foreseen issues. The reality was the Chinese manufacturer had sold the items as prices had increased by 40 percent by the time manufa turing was completed. We proceeded to compromise and bought a batch for an in between price 782 ysd as currently 900 plus. The issue is in sri lanka the box
Bars were going at 175. They are now 225 rs per kg. Less demand for it. Already private sector has ceased new projects. there is definitely a ceiling in cost as otherwise one would never recover it. Ask yourself, would u build a house or project if costs are now exceeding 40 to 50 percent. Can a contractor conclude his exceeding projects and will u start new ones. What if these costs are approaching 80 to a 100 percent. So balance is a key. The demand will reduce and rebalance as projects get pulled.
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