Currently, the prices in western market ranges from Rs 24,000 per tonne to Rs 28,000 per tonne.

Nevertheless this price is lower than the same period last year by Rs 3,000 per tonne. The low demand can be attributed to the lesser-than-usual demand from the industrial sector and also to the commissioning of new plant by Bhushan Steels at Ghaziabad in Uttar Pradesh which has increased supplies. Bhushan Steel's additional capacity has pushed up production by 100,000 tonnes per annum at 140,000 tpa.

Last year during end May, the prices had risen to Rs 31,000 per tonne. Even volumes sold so far by most of dealers is less than thecorresponding period of last year. Dealers in Maharastra who used to manage sales of 1,000 tonnes a month are managing sales volumes of mere 650 tonnes to 750 tonnes a month.

Considering that monsoons in the western region is less than a month away, this is not good news for manufacturers. Prices in the western region generally set the price for galvanised sheets in the entire country. Basically price first rises in the western region, which is then followed by similar price rise in Guhawati, followed by price rise in Madhya Pradesh and finally in the northern region such as Punjab and UP. The problem to manufacturers is on two counts.

First the price rise announced have not been able to cover the extra cost of rise in zinc prices and of CR sheets. According to analyst the cost for manufacturers' selling 26 gauge GS at today's price is Rs 29,000 per tonne, which is higher than the present market price by Rs 1,000. Secondly, the problem for the manufactures and the traders is that sales in the month ofApril to May is more than 50 per cent of the yearly sales. The remaining nine months is generally slack reason for most of the trade in galvanised sheets.

Fundamentally all the change done by either the retail or the bulk consumer for changing the roofs is during the pre-monsoon season only.

Interestingly the rise in price of galvanised sheets has seen more demand for thicker grade sheets because they are cheaper. But presently the thicker grade sheets have totally disappeared from the market, putting additional pressure on the thinner grade sheets. Consequently price rise in thinner grade galvanised sheets is steeper than thicker grade sheets.

But here the problem for traders is that customers preference in the western region is for thicker grade sheets as against those in the eastern region who prefer to buy thinner sheets and replace it every year.

The choice for manufactures is difficult. If they raise production and they are unable to sell, then they are saddled with inventory for six months. Ifthey do not produce adequate quantities they miss the boat for sales at the best price for the entire fiscal 1999-2000.