KARACHI: Steel bar makers on Thursday gave the first post-budget shock to consumers by raising prices by Rs5,000 per tonne to Rs150,500-151,500 per tonne citing unexpected surge in international scrap prices.

Before the Budget 2021-22, manufacturers had increased the prices by Rs3,000 to Rs146,500 per tonne. Steel bar makers had informed the construction sector that rising steel scrap prices in world market had affected their cost of production.

Keeping in view steel bar price of Rs110,000-113,000 per tonne prevailing in Nove­mber 2020, the total price jump to date is Rs38,000-40,000 per tonne.

However, the average per tonne import price of iron and steel scrap has dropped to $386 per tonne in 11MFY21 from $389 per tonne in the same period in FY20.

According to the figures of Pakistan Bureau of Statistics (PSB), total iron and steel scrap imports in 11MFY21 rose 4.429m tonnes, valuing $1.7bn versus 3.6m tonnes at a cost of $1.4bn in the same period in FY20.

Former chairman Association of Builders and Developers of Pakistan (ABAD) Hassan Bakhshi feared that the Prime Minister Imran Khan’s dream of providing low-cost housing to the masses under the Naya Pakistan Housing Scheme is unlikely to materialise in view of persistent and unchecked increase in prices of steel bars and cement. He urged the government to allow import of steel bars at reduced duties and taxes to break the cartel of steel bar manufacturers.

Mr Bakshi said the cost of construction on a high-rise project has increased by 10-15 per cent keeping in view a jump of 50pc in steel bar prices in the last one-and-a-half years when steel bar price was Rs100,000 per tonne. Steel bars hold 40-45pc share in total construction cost of a high-rise project.

Published in Dawn, June 25th, 2021