KARACHI: Manufacturers on Friday again jacked up steel bar prices to an unprecedented high of Rs277,000 per tonne blaming a massive rupee devaluation and rising prices of raw materials that pushed up the cost of production.

After increasing the prices by Rs10,000 less than a week ago, the steel makers delivered the second price shock of Rs22,000 per tonne despite thin construction activities evident from dwindling cement sales during July-December 2022-23.

The surging prices of the key building materials have put extra pressure on the construction cost which has risen by 60pc in less than a year.

Amreli Steels Ltd has issued a new rate of Rs277,000 per tonne for 9.5/10mm-12mm and Rs275,000 for 16mm and above. The company has warned its customers that it is not taking new orders due to a severe shortage of raw materials.

Agha Steel Industries has quoted new rates of Rs273,000 per tonne for 16-32mm and Rs275,000 for 10-12mm.

While closing the booking due to backlog and material shortage, Naveena Steel Mills has issued a new rate of Rs273,000 for 16-32mm and Rs275,000 per tonne for 10-12mm.

With all new orders subject to confirmation, Faizan Steel has fixed the rate at Rs275,000 for 10-12mm and Rs273,000 for 16-25mm. Itehad Steel has raised the rate to Rs272,000 for 10-12mm and Rs270,000 for 16-12mm.

Zarak K. Khattak, Chief Executive of FF Steel, told Dawn that thousands of containers carrying steel scrap are still stuck up at the port including 150 containers of his company.

When asked why steel prices have been increased so mercilessly, he said that imported consignments are cleared at the prevailing rupee-dollar parity but currently banks are not releasing the documents, forcing manufacturers to lift scrap from the open market at exorbitant rates since the start of this month to run their units. “Scrap dealers, who also have old stocks, are now fully cashing in on the situation,” he added.

He said prices of steel bars fluctuate on the market dynamics as well as on exchange and global scrap rates.

Mr Khattak said that many mills were running out of scrap stocks and the situation would be more alarming after Feb 20.

“No new letters of credit are being opened due to the uncertain dollar rate while banks are also creating hurdles. Steel bar is the base of any construction project and any closure of the steel bar industries will lead to the collapse of industries like cement, sanitary, tiles, wooden work, aluminum, paint, etc,” he feared.

Published in Dawn, January 28th, 2023