KARACHI: Steel bar prices have reached another all-time high of Rs288,500 per tonne, showing a jump of Rs12,000 per tonne, due to shortage of raw material and current economic conditions as cited by the steel bar makers.

Amreli Steel Limited (ASL) has informed its Lahore region dealers regarding a new price of Rs288,000 per tonne for 9.5-10mm size, followed by Rs286,000 for 12mm and above size.

For Islamabad region, the rate of 9.5-10mm and 12mm and above steel bar sizes is Rs288,500 and Rs286,500, effective from February 2. The company informed its customers that it would not take new orders due to raw material shortage in the country.

Mughal Steel has also announced a jump of Rs12,000 per tonne in rebar prices from February 3. Union Steel informed its business partners for not taking any new booking from February 3.

Association of Builders and Developers Chairman Altaf Tai said the builders and developers have closed their projects costing billions of rupees and hundreds and thousands people have lost their jobs due to ever high prices of construction materials especially steel bars.

Cement sales drop amid construction slowdown

He urged the government to allow import of construction materials from neighboring countries on the basis of barter to defuse the current situation, otherwise builders and developers will be forced to move their investments to other countries and that move will be detrimental to Pakistan’s economy.

Cement

Despite a recovery of 5.24 per cent in domestic sales of cement in January, the overall volume of local despatches fell 14pc to 23.62 million tonnes in the first seven months of 2022-23.

Cement despatches, including both local and exports, increased 1pc in January to 4m tonnes against 3.96m tonnes.

According to the All Pakistan Cement Manufacturers Association (APCMA), local cement sales in January were 3.58m tonnes versus 3.41m tonnes a year ago, up 5.24pc. Exports plunged by 24.13pc from 551,006 tonnes in January 2022 to 418,067 tonnes last month.

During the first seven month of 2022-23, total cement despatches – domestic and exports – were 25.77m tonnes, down 18pc during the corresponding period of last fiscal year.

Domestic sales stood at 23.62m tonnes against 27.47m tonnes during the same period last year, showing a reduction of 14pc.

Exports were also down 45.4pc as volumes shrank to 2.15m tonnes during the first seven months of 2022-23.

A spokesman for APCMA said the continued political instability during the last few months and its serious effects on the economy were hurting the cement industry. He mentioned that cement makers are facing several challenges owing to the difficulty in opening the letters of credit (LCs) for coal, spare parts and other consumable items required in the smooth operation of plants.

He said the government must ensure that LCs are opened on a timely basis to avoid any supply disruptions and factory closures.

As per the latest reading of the Sensitive Price Indicator (SPI), average cement retail prices during the week ending on February 2 went up 1.68pc to Rs1,060 per 50kg bag from a week ago. The average price for the week ending on February 3, 2022, was Rs735.

Sunny Kumar of Topline Securities linked the fall in cement sales during the last seven months to a slowdown in construction activities, overall economic slump and higher construction costs.

Exports continue to show a declining trend due to a global economic slowdown, higher interest rates and unfavourable export pricing. He said some recovery is anticipated going forward. Flood rehabilitation programmes will gain pace as the country prepares for general elections and the post-winter season. Declining coal prices can also provide support to the sector’s margins going ahead, he added.

Published in Dawn, February 4th, 2023