KARACHI: The import of iron and steel scrap in quantity terms plunged by 33 per cent in 4MFY22 to 1.227 million tonnes from 1.824m tonnes in the same period last year.

However, the total import value of scrap rose by 9 per cent to $704 million in July-October period from $646m in the same period last year, witnessing 55.6pc increase in average per tonne price to $551 from $354 in 4MFY21, data released by the Pakistan Bureau of Statistics (PBS) showed.

In October, arrival of iron and steel scrap stood at 347,888 tonnes valuing $204m as compared to 331,003 tonnes costing $192m in September, while imports in October 2020 were 411,228 tonnes amounting to $161m.

Manufacturers continued pushing up rates citing higher exchange rates, fuel and electricity prices and shortage of scrap. Amreli increased its steel bar price by Rs3,000 to Rs193,000-Rs195,000 per tonne depending on gauge and quality from Nov 15. Others also raised prices by Rs3,000-Rs5,000 to Rs192,500-Rs195,500 per tonne.

Steel bar prices have surged to Rs195,000 per tonne

Steel bar price in November 2020 was Rs110,000-113,000 per tonne.

F.F. Steel chief executive Zarak K. Khattak told Dawn on Saturday from Lahore that supply chain issues of shipping lines had severely affected the import of scrap in the last few months. “Pakistan-bound containers are stuck at different ports all over the world such as South Africa, India, Malaysia etc.”

He said 85pc of imported iron and steel bar was utilised in manufacturing of steel bars while the rest in making steel structures.

He said the working capital bank lines, which once sufficient for 100pc of the demand for different factories, were now only able to service 60pc of the tonnage due to surge in international scrap prices.

Mr Khan said the global commodity rush is having its toll on all manufacturers around the world including Pakistan. After easing of pandemic, supply chain issues have erupted. He said China, which used to produce 850m tonnes out of total production of 1,650m tonnes, had reduced its iron ore production to cut it carbon foot print. The alternative route of steel making ie from scrap is witnessing a lot of pressure resulting in price hike on world markets.

He said Pakistan is wholly dependent on imported scrap as there are no iron ore-based blast furnaces in the country except Pakistan Steel Mills (PSM), which has been closed since 2016.

Pakistan Association of Large Steel Producers (PALSP) secretary general Wajid Bukhari claimed that “drop in iron and steel scrap imports need to be checked as to which kind of raw materials have faced decline. Scrap import may not be included in it. It must be cold rolled coiled steel from pipe mills. Scrap import is stable.”

The production of billets/ingots rose by 15pc to 1.229m tonnes in July-September 2021-22 from one million tonnes in the same period last year. Billets are used in making steel bars.

Production of hot and cold rolled sheets, strips, coils and plates, also known as flat steel products used in making steel pipes, sheds, electronic items, went up by 12.5pc to 854,500 tonnes from 759,500 tonnes in 3MFY21.

Mr Khattak said increase in billet production was based on the import of iron and steel scrap made in June-August period.

Published in Dawn, November 21st, 2021