ISLAMABAD, Dec 8: The government has reduced customs tariff on the import of steel scrap by 25 per cent with immediate effect and directed Pakistan Steel to immediately import 100,000 tons of billets to contain soaring steel prices.

Industries and Production Minister Jehangir Tareen told a news conference here on Wednesday that steel prices had increased from Rs38,000 per ton to Rs45,000 in the last two weeks owing to higher demand for the product as a result of growth in economy.

He said one of the factors of rise in prices was the export of steel to Afghanistan where reconstruction activity had increased. Mr Tareen said that ITP (import trade price) charges on re-rolling scrap had been reduced from $430 per ton to $330 per ton while that of re-meltable scrap had been lowered from $400 to $300 per ton.

He said the decision was taken at a meeting presided over by adviser to the prime minister on finance Dr Salman Shah and also attended by the CBR chairman, member customs, Pakistan Steel chairman and steel dealers.

Mr Tareen said there was no increase in prices made by the steel mills and international prices were also stable, but the dealers were taking advantage of the higher demand.

He said tenders for the import of 100,000 tons of billets by Pakistan Steel would be floated in two days and the imports would be realized over a period of four weeks. He said that imported billets would be marketed at the cost of supply.

He said a decision in principle had also been taken to revive the ship-breaking industry at Gadani, which would meet 20 per cent requirement of the local steel demand.

He said that a joint committee of all stakeholders had been constituted to meet on December 22 to put in place a policy to revitalize the ship-breaking industry and create job opportunities.

Mr Tareen said Pakistan Steel had also been directed to blacklist the dealers who were found involved in hoarding steel and hoped that these actions would bring local steel prices back to the level of Rs38,000 per ton.

He said the supply of steel in the country increased to 4.7 million tons last year from 3.1 million tons in 2001-02 and was likely to increase to five million tons by the end of the current year.

In reply to a question, the minister said that all issues with the Al-Tuwairiqi group of Saudi Arabia had been resolved and a draft agreement had been sent to the group for formal signing to meet local steel demand.