April 10, 2008	Thursday	Rabi-us-Sani 3, 1429

KARACHI, April 9: The Pakistan Steel (PS) made a fresh increase in the prices of its products, including billets, bloom, galvanised steel and hot and cold-rolled, on Wednesday.It made an increase by Rs1,000 for billets and bloom, Rs3,500 per ton for hot and cold-rolled products and Rs3,500-4,500 per ton for galvanised products depending on their size.

On March 7, it had increased the rate of billets of all sizes by Rs2,500 per ton, followed by an increase in hot and cold rolled products by Rs5,000-7,500 per ton and Rs2,000 per ton in galvanised products.

The PS attributed the recent increase to a substantial increase in basic raw material prices, like iron ore, coke, coal, and other inputs. The mills raised its prices by 65 per cent between January 2007 and April 9, 2008, due to an increase in the rate of basic raw material in the world markets.

The price of iron ore has surged from $60 to $150 per ton in the last one year, followed by met coke price to $550 from $160 per ton in the same period.

Meanwhile, the coal price, which was $98 per ton before March 31, 2008, is now being quoted at $30 per ton.

The coking coal price is now being quoted at $350 per ton (FOB) which was around $290 per ton earlier in March. Because of this, the price of Met Coke has surged to $550 per ton (FOB). The price of iron ore has increased by 2.5 times, in addition to ever- escalating freight costs.

This global phenomenon has forced steel mills all over the world to substantially increase prices of all products.

A single increase of $150 per ton has been recorded in the last few days in hot-rolled and cold-rolled products.

A PS spokesman said that any large gap in prices between PS and international level would reduce imports, thereby increasing the already existing demand and supply gap. Hence it had become essential for the PS to review its prices periodically so that normal supplies to the markets are not disturbed. The PS had not reviewed prices of hot and cold-rolled products despite pressure of price-hike in the global market.

Meanwhile, a senior official in the PS, who asked not to be named, said that the price of iron and steel finished products, like billets, hot and cold rolled products and galvanised products, increased by 70pc in the world markets since January 2007.

Between March and April 9 alone, the price of iron and steel products increased by 25-30 per cent, he said.

He linked the price-hike to heavy buying by China and mergers and acquisition among big steel players which has been putting an extra pressure on world prices.

He said the PS meets only 18 to 20 per cent of domestic requirement of iron and steel products which used to be 30 per cent a few years back.

He said that consumption of iron and steel products in Pakistan has surged to 5.5 million tons per annum as compared to four million tons three years back.

Despite an annual production capacity of 1.1 million ton per annum, the PS production, however, remained stagnant at one million tons which failed to boost its domestic share, the official said.

To a query whether the government had taken any notice of frequent increase in prices, the official said that the Engineering Development Board (EDB), Ministry of Industries, Production and Special Initiatives, had asked the PS to index its prices according to international landed prices to control black-marketing, smuggling and other unethical business practices.

As the new government had not announced the setting up of the Federal Industry and Production Ministry, the EDB is taking the decision on its own and there has been no check on frequent increases in the prices made by the Pakistan Steel.

The official further claimed that the price of Pakistan Steel products has been lower by Rs8,000-10,000 per ton as compared to international landed price of steel products in world markets.