KARACHI, Nov 26: The Pakistan Steel (PS) on Wednesday further reduced prices of its products for the second time in the current month by Rs4,000-20,000 per ton following a continuous decline in raw material prices.

On Nov 12, the PS had slashed prices of various products by Rs4,500-12,000 per ton. The cut is aimed at further improving sales by the mills.

The price of billet (150x150mm and 25x125mm) has been reduced to Rs34,000 per ton from Rs48,000 while the price of bloom (260x260mm) has been cut to Rs34,300 from Rs48,300. Ingot square (75x960mm) now carries price tag of Rs36,400 as compared to previous Rs48,000.

The hot-rolled coil -- Prime (Milli Edge) up to 2.0mm x 1000/1220mm -- is now priced at Rs50,100 as compared to previous Rs70,100 per ton, and over 2.0 and up to 2.35 x1000/1220mm is now quoted at Rs49,500 as against Rs69,500 per ton. The rate of over 2.35 and up to 3.25x1000/1220mm coil is now tagged at Rs 47,500 as compared to Rs 67,500 per ton.

In chequered material, Tear Drop Pattern, the price of prime type has fallen to Rs50,000 from Rs70,000 while Secondary-A quality rate is now Rs48,000 as compared to Rs68,000.

The price of M S Slab (prime type) carries a new rate of Rs39,550 as compared to Rs59,550. The price of MS Thick Plates up to 29mm has been cut to Rs54,450 from Rs60,500.

The price of cold-rolled coils (prime) up to 0.55mm x 915 / 1220 / 950 is fixed at Rs56,800 as compared to Rs75,800 while the rate of over 0.55mm and up to 0.60x915/1220/950 has been reduced to Rs56,400 from Rs75,400 per ton. The price of over 1.6mm has been fixed at Rs52,200 as compared to Rs71,200.

The price of galvanized coils (prime) up to 0.55mm x 915 / 950 / 1220 has been brought down to Rs64,300 from Rs83,300 per ton while new rate of over 0.55mm and up to 0.60 x 915 / 950 / 1220 is Rs63,800 as compared to Rs82,800 per ton.

The price of pig iron CPI (all types, including off-grade CPI-S and imported) has been cut to Rs33,000 from Rs38,000, while FPI-four / 4S / 4HMn price is now tagged at Rs39,000 as compared to Rs44,000.

In hard coke items, the new price of Coke Breeze Dust (0-25mm) is Rs35,000 as compared to Rs39,500 while the price of over 80mm item has been fixed at Rs50,000 from Rs65,000.

The Pakistan Steel is currently facing a hard time owing to massive slowdown in sales in the markets caused by thin construction activities, bottoming out of auto sales and electronic appliances in view of economic meltdown.

There are also reports that the mills is now facing severe cash flow problems and even it does not have enough money for payment of next month’s salaries. The mills is reported to have piled up inventories of over Rs10 billion.

The official, however, admitted that the mills is currently facing liquidity problems but he did not say anything about problems of payment of salaries to staffers and workers for next month. The bad days of mills had started in the last few months following declining trend in world steel prices and falling sales figures.

In July this year, sales peaked over Rs5 billion falling to Rs3 billion in August, Rs2 billion in September and Rs1 billion in October.

Even November had seen facing laggard sales. He said the PS had to slash prices twice in a month so that sales could pick up.

President, Karachi Iron and Steel Merchants Association (KISMA), Shamoon Baqar Ali, said the price of imported steel material is now costlier in the markets as compared to Pakistan Steel’s products after a cut in prices.

He said that the cut in prices would encourage builders and developers to start construction activities as their projects, which had been hit by rising cost of construction. He said the price of steel bars and other products are set to fall further in coming days.

He added that there was actually a slowdown in construction activities instead of a complete suspension. He said that the PS had finally realised that its prices had been very high that hit its sales very badly.

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.

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 and 5.5 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 the demand is met through imports.