LAHORE, April 26: The contract for expansion of the Pakistan Steel production capacity from one million tons per annum to three million tons per annum costing $1 billion would be signed within next six months.
This was stated by Pakistan Steel Chairman Lt-Gen (Retd) Abdul Qayyum Khan while addressing a meeting of the Lahore Chamber of Commerce and Industry here on Monday. He said that the 22-year-old mills established in 1982 would be revamped before starting the expansion.
He said that the PS was not responsible for the extraordinary increase in prices of iron and steel products in the recent past because it had only one millions tons per anum production capacity against the four million tons per annum consumption in the country and the remaining 3 million tons was being imported because there were no restrictions on import.
The PS was selling its products below the import price on first-come-first-served basis. He said that the prices of iron and steel products would not fall because of significant increase in the prices of raw materials and shipping charges worldwide.
He said that increase in iron and steel prices had been triggered following the discontinuation of raw material exports by China and the imposition of anti- dumping duty on it by US last year.
China, which met two third raw material demand of the world, had decided to discontinue its raw material exports and use it for expanding its steel production capacity from 260 million tons per annum to 300 million tons per anum.
Answering questions the Pakistan Steel chairman said that the mills had allowed a Saudi Arabian company to establish a billet manufacturing plant with one million tons per annum capacity at its premises.
The Pakistan Steel was not an importer of iron and steel products but had imported and sold billet for meeting the domestic requirements under a directive of the government in the recent past.
He said that the mills could not make arrangements for countrywide supply of its products at uniform rates. The products were supplied from the mills depot at Karachi and the buyers transported the same to different parts of the country at their cost.
He said that the mills had frozen the dealership at the existing figure of 694 pending the formulation of a new formula for grant of new dealership. He said that the mills would consider the demand of the vendor industry to sanction quota for industrial units.
The demand for the establishment of a depot at Lahore would also be considered. The particulars of supplies to the dealers would be available on the steel mills website for information.
Lahore Chamber of Commerce and Industry President Mian Anjum Nisar, in his address of welcome said that 10 per cent cut in duty on import of billet import had helped resolve the recent steel crisis.
Duty on shredded and bundled scrap also required to be reduced for bringing down the billet production cost. Rate of customs duty also required to be reduced from 20 per cent to 15 to 20 per cent.
