Border tensions between Russia and Ukraine have destabilised the recovery process of India’s biggest brass-parts cluster in Gujarat as far as supply of raw materials is concerned.

Nearly 7,000 brass-parts manufacturing units, mostly MSMEs, which are functioning in and around coastal Jamnagar town of Gujarat, are experiencing lower demand due to heavy ups and downs in brass scrap over the past 1 month. Moreover, there has been downfall in exports due to the tense situation between the two Eastern European countries.

Ever since the geopolitical tension along the Russia-Ukraine border increased, the international brass scrap market is witnessing high volatility, said Lakhabhai Keshwala, president of Jamnagar Factory Owners Association, adding, “Brass parts makers in Jamnagar are solely dependent upon imported brass-parts and lead. Nearly 80% of these raw-materials are being sourced from the US and around 20% are being imported from African countries. Due to the tense situation between Russia and Ukraine, coupled with pandemic, the market has become highly volatile. As a result, brass-part makers are finding it extremely difficult to import raw-material.”

Since the outbreak of coronavirus, the brass-parts industry in Gujarat has suffered a lot. Overall production of the cluster has gone down by almost 50%. Since December last year, the industry got momentum through following fresh orders from auto and electric sectors. However, the third Covid-19 wave again forced them to slow down production as many units were finding it difficult to recover money for their sold goods.

According to Keshwala, due to limited capacity brass-parts units in Jamnagar refrain from storage of raw-material in a large quantity. They generally buy brass scrap as per their requirement.

Due to high volatility in raw-material prices coupled with reduced exports and domestic orders, most of the brass-parts makers are preferred to slow down production activities, he said.

Prices of 1 kg brass scrap are fluctuating by Rs 30 to Rs 40. Currently, prices of brass scrap are hovering around Rs 490. A few days ago, it crossed Rs 500 and touched as high as Rs 510 per 1 kg in the international market. Just a year ago prices of brass scrap was around Rs 415 and before the outbreak of coronavirus, it was as low as Rs 290 per kg.

Gujarat’s brass-parts cluster consumes over 8000 tonne of brass scraps every month. Annual turnover of the brass parts industry in Gujarat is over Rs 500 crore. Companies including Hero Honda, Maruti Udyog (MUL), Atlas Cycles, Prestige Cooker, Bajaj Auto, Anchor Switches, etc, are the major buyers of brass parts from the brass makers functioning near Jamnagar.