KARACHI: In the absence of any regulatory check at the government end, the manufacturers on Saturday again raised the steel bar prices by another Rs15,000 to toss it to historic highs above Rs300,000 per tonne for the same reasons cited a day earlier.

Steel bar consumers were surprised and shocked to receive over Rs25,000 per tonne hike in less than two days.

A steel bar dealer said rising prices have made customers shaky as they ask for the rates and walk away instead of making any purchases.

The government should take notice of abnormal increases in steel prices whether the manufacturers are artificially jacking up the prices amid thin construction activities or due to raw material shortages and issues in the opening of letters of credit.

Amreli Steel Ltd issued a new rate of Rs303,500 for 9.5-10mm bars followed by Rs301,500 for 16mm and above. On the other hand, the company informed its business partners that it would not take orders due to the looming shortage of raw materials.

While keeping its booking closed, Naveena Steel Mills also issued a new price of Rs301,500 per tonne for 16-32mm and Rs303,500 for 10-12m.

A dealer said the current price of the hot rolled coil is Rs290,000 per tonne. This is a basic raw material for steel products and pipe manufacturing. The local steel processing industries also buy this raw material as it is not locally produced. The hot rolled coil is also converted into a cold rolled coil which is used in automobiles and other products, he added. Cold-rolled coils are also converted into galvanised sheets by local processing mills.

He said cold rolled coil is currently sold at Rs320,000 per tonne while galvanized sheet rate is Rs330,000 per tonne. “The rate of cold and galvanized sheets has risen by Rs18,000 per tonne in just one day,” he added.

Pakistan Association of Large Steel Producers Secretary General Wajid Bukhari said the State Bank of Pakistan has failed to resolve issues in the opening of LCs, which caused a severe shortage of raw materials that led to production delays and the closure of numerous steel businesses and widespread job losses.

The steel sector employs over 200,000 people directly and has an annual production capacity of over five million tonnes. However, the LC crisis due to a shortage of foreign currency reserves has forced many steel companies to reduce production or even shut down operations, he claimed.

A total of approximately 7.5 million jobs are at stake because zero steel production will result in the closure of all allied industries of the construction sector, he said.

Published in Dawn, February 5th, 2023