KARACHI: The production of iron and steel, with billets/ingots mainly used in the construction industry, in the last 10 years swelled by 196 per cent to 4.777 million tonnes in FY21 from 1.616m tonnes in FY12.
H/CR sheets/strips, coils/plates, also known as flat steel products for production of electronics, surged to 3.296m tonnes in FY21 from 1.850m tonnes in FY12, Pakistan Bureau of Statistics (PBS) data of Large-Scale Manufacturing (LSM) showed.
Rising production of steel related products has led to higher imports of raw materials. For making steel bars, the country’s iron and steel scrap imports in FY21 rose to 4.719m tonnes costing $1.86bn from 1.568m tonnes valuing $538m in 2011-12, the PBS figures showed.
Besides, iron and steel imports swelled to 2.992m tonnes amounting to $1.959bn in FY21 from 1.755m tonnes ($1.4bn) in 2011-12.
Commenting on rising demand for steel bars, Pakistan Association of Large Steel Producers Secretary General Syed Wajid Bukhari said steel bar production till 2011-12 was about three to 3.5m tonnes while the current demand now hovers between 6.5m tonnes to 7m tonnes.
He attributed increase in steel bar prices to soaring scrap prices in the world market to $550 per tonne from $300 per tonne while one dollar is now equal to 168 as compared to Rs85 in 2011-12.
He said gas price increased to Rs97 per unit from Rs15 per unit in the last 10 years followed by power tariff to Rs21 per unit from Rs6 per unit. Freight charges are 100 per high now.
Mr Bukhari was of the view that steel bar demand would soar to nine to 10 million tonnes by 2023-24 in view of rising construction activities.
Private sector consumes 80pc of total steel bar production as compared to 20pc by the public sector, he added.
Hassan Bakhshi, former chairman Association of Builders and Developers (ABAD), said a multi-storey high project to be built on 1,000 yards plot with three floors for car parking requires around 1,100 tonnes of steel bars.
He claimed that steel bar demand has been on the rise due to 80pc construction work on highrise projects in Punjab while the Sindh Building Control Authority (SBCA) has been creating problems in clearing new projects.
“Only 91 projects have been cleared by the SBCA in the last two years in Karachi as compared to 500-7,000 projects a year some 10 years back,” he said.
The projects being promoted on the social, print and electronic media belong to Punjab while in Karachi, advertisement campaigns have been running for old projects which had been approved very late.
Pakistan Association of Parts and Accessories Manufacturers Association chairman Abdul Rehman Aizaz was of the view that auto assemblers and their vendors consume 15,000-20,000 tonnes per month of iron and steel in different forms which are used in making different parts by the vendors and the assemblers.
Bike production swelled to 2.475m units from 1.645m units in FY12, while jeeps/cars production rose to 163,122 units from 154,706 units in FY12.
Trucks and buses production in FY21 jumped to 3,808 and 570 units from 2,597 and 568 units FY12.
Domestic appliances and electronic products have shown phenomenal growth in the last 10 years. For example, production of refrigerators, deep freezers and air conditioners has swelled to 1.337m units, 109,029 units and 505,493 units from 1.062m units, 56,313 units and 240,338 units in FY12. Electric fans production rose to 2.498m units from 1.908m units.
Published in Dawn, September 15th, 2021