KARACHI, Nov 12: The Pakistan Steel (PS) has slashed the prices of its various products by Rs4,500-12,000 per ton following decline in raw material prices in world markets.

A PS official said that the price of billets had been reduced by Rs8,000 per ton following decline in hot rolled items’ prices by Rs5,000-10,000 per ton across the board. The price of galvanised products has been cut by Rs4,500-5,000 while the price of cold rolled items has been decreased by Rs5,000-7,000. The price of thick plate has been slashed by Rs12,000 per ton.

For example, the price of billets (150x150mm) and (125x125 mm) after the reduction, is now quoted at Rs48,000 per ton.

The hot rolled coils, Prime (Milli Edge) up to 2.0mm x 1000/1220mm, is now priced at Rs70,100 per ton while over 2.0 and up to 2.35 x1000/1220 mm is now quoted at Rs69,500 per ton.

The price of cold rolled coils (prime) up to 0.55mmx915/ 1220/950 is Rs75,800 while the rate of over 0.55 mm and up to 0.60x915/1220/950 has been reduced to Rs75,400.

The price of galvanised coils (prime) up to 0.55mmx915/ 950/1220 has been brought down to Rs83,300 per ton while the new rate of over 0.55mm and up to 0.60 x915/950/1220 is Rs82,800 per ton.

Another official of the PS said that the price of galvanised sheets had been cut by five per cent while the price of cold rolled products had been reduced by 7.5 per cent.

It is not clear that whether the PS has really passed on the full impact of falling steel prices in world markets or it has passed a little impact to the consumers. The steel prices have plunged by 50 per cent in world markets since July this year. The PS has increased the rate of its products by three times in the last four months.

However, according to a PS official, the mill may not come out with further cut in prices immediately as it will analyse its impact in the local steel market.

He said that the sales of PS had touched Rs5 billion in July, 2008, but it had been persistently falling owing to a slowdown in construction activities. In October, it recorded the lowest at Rs1.2 billion.

The sale of Pakistan Steel in 2007-2008 touched Rs39 billion as compared to Rs36 billion in 2006-2007.

Consumption of iron and steel is estimated between 5 to5.5 million tons per annum in which Pakistan Steel produces 1.1 million tons of steel products while the re-rolling mills produce 1.5 million tons per annum and the rest of demand is met through imports.

According to an iron and steel merchant, the cut in billet price (main raw material of making steel bars) will result in reduction of steel bar prices to Rs55,000 per ton from the current 62,000-63,000 per ton.

Consumers had paid Rs80,000 per ton few months for buying steel bar (Sarya). He said that local markets were likely to witness price cut in steel bars by the next two to three days. The cut in steel bar prices would reduce the construction cost, he added.

However, he felt that the steel market anticipates further cut in prices of Pakistan Steel’s products. The Mill has still got the capacity for another price reduction as the raw material prices in world markets have fallen by more than 50 per cent from September till now especially.

He said that there had been a slowdown in sales of steel products for the last few months owing to reducing construction activities.