Volatile Raw Material Prices Hit Brass Parts Industry In India.

BS reported that the brass parts industry in Jamnagar is reeling under an uncertain pricing situation. The industry has witnessed steep rise in prices of brass scrap, which has risen from INR 250 per kilogram to INR 300 per kilogram in past 5 months.

Mr Ramjibhai Patel president of Jamnagar Factory Owners' Association said that the small players making brass parts have been finding it tough to bear the excessive burden of increased prices of brass scrap. The high prices of brass scrap have restricted our growth. Volatile prices are not affordable for small players of the brass parts industry.

The prices of brass scrap are based on copper prices which have seen fluctuations on the London Metal Exchange in last 5 months. This caused brass scrap prices to rise by almost INR 25 per kilogram to INR 30 per kilogram to INR 300 per kilogram to INR 305 per kilogram.

Mr Patel said that as prices of brass scrap remains volatile, buyers of the end products are staying away from placing fresh orders. The buyers of end products are not coming with new orders as there is uncertainty about the prices of end products due to volatile brass scrap prices. The industry will get some relief only when the prices stabilize.

Mr Jinesh Shah MD of Rajhans Impexs Private Limited said that "Brass scrap prices are based on copper prices on LME so we cannot do anything to control it. But if government removes 4%special additional duty it would give a relief to the brass part manufacturers and the government tax burden will also get reduced.”

Echoing similar sentiments, Mr Bharatbhai Dodhiya secretary of JFOW found it necessary to reduce the tax burden on the industry to maintain the viability of the business. He said that the only hope for the industry is to get some relaxation in tax structure since most of the units are small scale manufacturers and processing units. They cannot take advantage of the government tax schemes.

Jamnagar imports about 300 containers of brass scrap every month, on which the government levies five per cent customs duty, 10% excise duty and four per cent SAD. However, SAD is refundable to the traders along with 2% cess.

Source : steelguru.com