New investments on hold in metal sector

MANILA, Philippines - New investments in the Philippine metal industry are on hold as volatile world prices continue to take their toll among local firms, the Philippine Exporters Confederation Inc. (Philexport) said.

Philexport metals sector trustee Jimmy Chan said most local metal companies are choosing to delay spending on expansion projects until after the coming national elections amid sluggish global demand.

“Other local metal companies have plans but due to low metal prices, manufacturers are cautious and waiting for market movement after the lunar holidays and the Philippine election,” Chan said.

Aside from the global slump in metal prices, Chan said the sector is also experiencing problems concerning importation, leading some local metal firms to defer their investment projects.

“The Philippine ports cannot handle the big cargoes. So instead of having good flow of goods, it is scheduling the berthing of big vessels, causing too much delay. Currently, we still have big bottlenecks and the delays are still reaching two to three months,” he said.

Chan said metal exports are expected to contract this year due to sluggish global demand.

“I think this is going to be a challenging year because most of the export markets have difficulties in terms of growth projections,” he said.

“Europe is bad, America is conditional, Japan has government initiatives and China had doubtful growth potentials, so cautious export trend will most likely prevail. In the second half, (we) will see the US government intervention from current administration’s window dressing and last hurrah,” Chan added.

Chan, however, said he expects promising growth for the domestic metal sector this year which would be fueled by the projected more than 10 percent growth of the automotive sector.