Car Prices May Soon Go Up As Steel His Ceiling
By Rosli Abidin Yahya

Bandar Seri Begawan - The soaring global steel prices may cause price of cars and motorcycles in the sultanate to increase in about five to six months, warned industry observers.

They said that currently car dealers managed to keep the prices down as they still had existing stocks to clear.

"Car prices may increase by about 20 per cent while motorcycles will go up by about 18 per cent in about five to six months time," they said.

They added that the prices of cars and motorcycles had to be adjusted by car manufacturers because of the increase in steel prices, especially the hot rolled coil (HRC) and cold rolled coil (CRC) types.

Around 70 to 80 per cent of car components are made of steel while motorcycles contain around 60 to 65 per cent. The remaining materials are plastic, rubber, aluminium, tin and copper.

Worldwide steel shortages due to strong demand from the fast growing economy of China and reconstruction in Iraq have caused global prices of steel to more than double

to an average of US$630 per tonne from $310 in December last year.'

The international price of HRC has increased by 93 per cent to US$580 per tonne from $300 last year while that of CRC has increased by 46 per cent to US$630 per tonne from $430.

Meanwhile, local contractors also moaned about the soaring prices of steel bars, which have gone up from B$450 to about $980 per tonne.

"Contractors who have signed contracts with land owners to build houses have to absorb the increase in prices.

"However, some land owners shelved their plans to build houses as prices of steel had gone up by more than 100 per cent while prices of other building materials had increased by about 30 per cent," contractors said.

When enquired, the Bulletin was told that the increasing prices of other building materials such as sand and stones were due to increasing prices in spare parts of excavation equipments, which were made of steel.

"The increase in the global prices of steel has caused other building materials to increase too, directly or indirectly," said contractors. -- Courtesy of Borneo Bulletin

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