The rise in steel prices could lead to price increases in derivatives such as nails, wire rod, and those linked to steel.
SANTO DOMINGO- As projected, the price of steel experienced increases in the Dominican market, as a consequence of the war in Ukraine, which will cause other derivatives of the product to also be increased in the coming days in the businesses where they are distributed.
Engineer Arturo Espinal, president of the Dominican Association of Hardware Stores (ADEFE), said that the price of that product began to be quoted three thousand pesos higher in the local market since last Wednesday, March 2nd.
He attributed the increase to the pressure generated by the crisis in Russia and Ukraine, which are among the main importing countries of the material.
“When those countries leave the market, they put pressure on the market that remains open, which does not always have the capacity to immediately supply the demand, and this effect causes a price increase, even if the local industry has not purchased at new prices,” Espinal explained.
He believed that the rise in steel prices could cause derivatives such as nails, wire rod, and those linked to steel to skyrocket in the coming days.
Frankely Núñez, from Ferreacero, said that since last week a bundle of steel has been selling for 74,000 pesos and that the projection is that the price could increase again, given the conflict between Russia and Ukraine. “The war will definitely affect us all,” the merchant said.
This is what economists said
Magin Díaz, an economist, stated this week that the situation between Russia and Ukraine represents the greatest source of uncertainty for the entire world in 2022.
While participating last Monday as a speaker at the “thematic breakfast under the perspectives, horizons and economic challenges of 2022”, he maintained that this crisis has impacted the prices of oil, natural gas, coal, that is, this has an impact on fuel prices, in the electricity sector, in commerce,” added Díaz.
“We imported more than $300 million worth of iron and steel from Ukraine last year, and 15 percent of tourism came from Russia and Ukraine, at least last month.”.
“The Dominican government will have to face the price increase with increased subsidies and will have to reallocate spending to create more opportunities for the sectors that need it,” Díaz said.
Dominican Republic of the main destinations
The Dominican Republic is one of the main Latin American countries that receive imported products from Ukraine and, at least in 2020, was the main one, which is why the Minister of Industry, Commerce and MSMEs, Víctor -Ito- Bisonó, is already anticipating a scenario of pressure for the Dominican economy due to the war situation that country is experiencing with Russia.
“We bring 56 percent of the billets to make rebar, chain-link fencing, barbed wire, nails and a series of components, from Ukraine,” Bisonó reported during an interview with Diario Libre.
In 2020 alone, the Dominican Republic imported products from Ukraine valued at approximately US$92.3 million, according to the International Trade Centre's Trade Map platform, as reported by Diario Libre.
In that year, imported cast iron, iron, and steel products had a combined value of approximately US$88.8 million. Other imports included wadding, felt, and nonwoven fabrics; specialty yarns; twine, rope, and cordage valued at US$793,000; and plastic and plastic products valued at US$608,000, among other items.
Imports from Russia in 2020, according to Trade Map, totaled approximately US$79.2 million, with foundry products, iron and steel being the main items at US$31 million; followed by fertilizers at US$12.2 million; and milling products, malt, starch and flour, inulin and wheat gluten at US$11.8 million, the newspaper reported.
