KARACHI: A reverse trend in the rupee-dollar equation has again forced manufacturers to raise prices of steel bars after a drop last month on account of the rupee’s gains.

Syed Wajid Bukhari, General Secretary of the Pakistan Assoc­iation of Large Steel Producers (PALSP), claimed on Thursday that steel bar prices had plunged to Rs245,000 per tonne last month after hitting a peak of over Rs300,000 per tonne.

But the trend is now changing and the rebar prices currently hover between Rs265,000 and Rs268,000 after a rising trend in domestic prices, he added, fearing that rates would go up in case the dollar continues to rise.

The increase in prices of steel bars appears surprising in view of a declining trend in iron and steel scrap prices in the world market.

Data released by the Pakistan Bureau of Statistics (PBS) suggests a drop in average per tonne price in iron and steel scrap to $467 during July-September FY24 from $580 in the IQFY23.

The country imported 591,892 tonnes of iron and steel scrap ($277 million) versus 648,510 tonnes ($376mn) during 1QFY23.

During September 2023, arrival of scrap stood at 200,189 tonnes ($92m) as compared to 208,325 tonnes ($117.6m) in September 2022, while August 2023 imports were 210,325 tonnes ($97m).

The APT during September 2023 stood at $457 while in August it was $462. During September the APT was $564.

Wajid Bukhari claimed that iron and steel scrap prices in the world market had surged by $25-$30 per tonne over the last two weeks on the back of a rising dollar.

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As a result, manufacturers have raised prices to offset the rising cost of production.

On Wednesday, the dollar traded at Rs286.90 as compared to Rs276.50 on Oct 16. The greenback hit a peak of Rs307.10 on Sept 5.

Wajid Bukhari said the demand for steel products had remained subdued due to a slump in construction activities and uncertain economic conditions.

Wajid said the steel bar industry was passing through a crisis as a number of mills had closed down while others were operating below capacity.

Many mills run for only 10 days a month.

He said those mills which had taken out loans were in deep trouble as they were selling rebars at a discount due to the depressed demand.

Construction cost has remained under pressure as cement prices have surged to Rs1,192 per for a 50 kg from Rs1,039 a year ago.

Published in Dawn, November 10th, 2023