KARACHI: Steel bar makers have increased the prices by Rs4,000 per tonne citing a bullish trend in iron and steel scrap on the world markets.

Pakistan Association of Large Steel Producers (PALSP) General Secretary Syed Wajid Bukhari claimed that the new rates of steel bars hovered between Rs250,000-262,000 per tonne depending on the quality.

He said some loss-making mills could not pass on the needed increase due to low demand. Several units have closed recently and many declared losses and most of the mills are working on 30pc production capacity. “The steel industry is facing its worst crisis after 2008,” he claimed.

He attributed the price hike to a $20-25 per tonne rise in scrap prices in world markets due to the usually low collection of scrap in the winter.

Mr Wajid feared more price hikes due to supply chain disruption as the Red Sea Europe route was affected after attacks on shipping vessels, resulting in a rise in insurance and freight costs.

Some steel dealers said the increase in prices didn’t take effect in real terms amid sluggish demand caused by a construction slowdown in winter. Some dealers were clearing their stocks at old rates.

They quoted the rate of high-quality steel bars in the range of Rs265,000-267,000 per tonne depending on the size of 16m and above to 9.5/10mm.

Pakistan’s iron and steel scrap imports fell by 5pc and 17pc in quantity and value to 1.079m tonnes ($499m) in 5MFY24 from 1.143m tonnes ($65m) in the same period last fiscal year. The average per tonne price (APT) stood at $462 versus $529 in the above period.

In January 2023, steel bar rates were raised to Rs242,500-243,500 per tonne from Rs222,500-225,500 during the last week of December 2022 due to supply chain disruptions, rising raw material prices and high production costs.

The current predicament faced by Karachi-based industries, compounded by non-disbursement of the incremental electricity units consumption subsidy from July 2021 to October 2023, adds to the challenges already besetting the industry like currency depreciation, high borrowing costs, and substantial increases in input costs, particularly energy prices.

The subsidy, initially a breath of fresh air, now hangs in limbo, making it nearly impossible for industries to weather the storm, he said.

Published in Dawn, January 11th, 2024

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Trump 2.0
Updated 07 Nov, 2024

Trump 2.0

It remains to be seen how his promises to bring ‘peace’ to Middle East reconcile with his blatantly pro-Israel bias.
Fait accompli
07 Nov, 2024

Fait accompli

A SLEW of secretively conceived and hastily enacted legislation has achieved its intended result: the powers of the...
IPP contracts
07 Nov, 2024

IPP contracts

THE government expects the ongoing ‘negotiations’ with power producers aimed at revising the terms of sovereign...
Rushed legislation
Updated 06 Nov, 2024

Rushed legislation

For all its stress on "supremacy of parliament", the ruling coalition has wasted no opportunity to reiterate where its allegiances truly lie.
Jail reform policy
06 Nov, 2024

Jail reform policy

THE state is making a fresh attempt to improve conditions in Pakistan’s penitentiaries by developing a national...
BISP overhaul
06 Nov, 2024

BISP overhaul

IT has emerged that the spouses of over 28,500 Sindh government employees have been illicitly benefiting from BISP....