Supply and demand of raw materials

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Soaring  Raw  Material  Prices,  How  They Influence  Demand  and  Supply  in  Indian  Paint 
Industry
The  Indian  Paint  industry,  estimated  to  be  
Rs.23,000 Cr.  industry,  has  been  growing  at  a   
rate  of  above  15  per  cent  for  the  past  few  
years.  The  organized  players  of  the  industry  
cater  to  about  65  per  cent of  the  overall  
demand, whereas  the  unorganized  players  take  
care  of  the  remaining 35  per cent,  in  value  
terms.
Raw  materials  constitute  56  percent  of  the  total  
cost  for  the  paint  industry  in  India.  It’s  an  
important  factor  for  maintaining  operating 
margins.  Around  600  raw  materials  are  required  
by  the  paint  industry  and  all  the  materials  are  
directly  related  to  crude  oil  prices.  But  the  
most  important  raw  materials  is  titanium  
dioxide,  which  accounts  for  25-30  per  cent  of  
the  costs.
The  Indian  paint  industry  is  highly  raw  
material-  intensive  and  any  fluctuation  in  the  
Indian  paint  industry  is  prices  of  Titanium  
dioxide  and  Petroleum  directly affect  the  
production  cost.  As  a  result,  Materials  suppliers  
struggle  to  make  profit;  Tier  suppliers  and  
OEMs  find  themselves  torn  between  raising 
prices  and  suffering  the  cost  increases.    
Ultimately,  it  is  the  end-consumer  who  bears  
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the  brunt  of  increased  finished  product  costs  
due  to  inelastic  demand  for  paint.
  General  Economic  Impact  of  a  Changes  in  Raw  Material  Prices  on  Market  Demand  and  
Market  Supply  For  Any  Final  Good   
When  cost  of  production  or  input  cost  
increases,

Supply and demand of raw materials

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