KARACHI, March 31: Steel industry is seeking duty-free import of billets to meet the growing demand of quality steel products, such as steel bars and sections.

Presently, there is an estimated shortage of about 0.8 to one million tons of billets, and is expected to grow with the passage of time because a large number of mega projects, such as dams, bridges and high rise buildings are fast coming up.Industry sources told Dawn that if the government fails to take corrective measures, the country would soon run into another crisis where consumers would be facing shortage of steel products and spiralling prices.

Pakistan Steel produces only around 350,000 to 400,000 tons per year against a total requirement of around 3.5 million tons of long products in the country. This means that a requirement of only eight to 10 per cent of long steel products is being met by the Pakistan Steel.

Despite the fact that there are other sources which produce steel billets, including melters whose capacity is in access of 2.5 million tons per annum, their products do not ensure high quality required for producing quality steel long products needed for dams, infrastructure and high rise buildings.

Most of the steel melters have induction melting furnaces of capacities of two to ten tons in which no refining can be done. There are only one or two melters, no one has ladle refining furnaces (LRF).

Consequently, the steel industry feels that with such a state of affairs, the question of producing steel billets with consistent quality as per world standards does not arise.

Another source from where steel is being made available is the ship-breaking from where approximately 100,000 to 200,000 tons of ship scrap plates and steel bars are being produced, but they too do not conform with standard of BS4449 and ASTM, A-615 specification vogue all over the world.

According to industry’s estimates, there is an annual shortage of around 0.8 to one million tons of steel billets in the country and it will rise with the time as mega projects, like dams, bridges and high-rise buildings, are being constructed throughout the country. All these projects could not be built with inferior or sub-standard steel, but would require specified standards being met the world over.

In order to meet the looming shortage of quality steel products, the industry has suggested that the government immediately allows duty and tax-free import of billets by withdrawing five per cent customs duty and 15 per cent sales tax on all imports of billets and metable scrap.

It has been further suggested that import of steel should be allowed from all sources the world over, including India, which will give the advantage of proximity of distance and result in lesser freight charges. Presently there is a shortage of steel billets the world over, therefore, any hindrances from government side would be counter- productive.

In support of its argument, the industry has informed the government that prices of different steel products in the last two to three months escalated and are likely to go higher in coming months.

The industry pointed out that prices of twisted and deformed bars in January this year were being quoted around Rs37,000 and Rs40,000, but have now increased to Rs44,000 and Rs47,000 per ton, respectively. The Pakistan Steel has also increased prices of its steel products by Rs3800 per ton during this period.

The steel industry has put its suggestion before the Engineering Development Board and the Ministry of Industry and Production early this year, but so far no tangible results have come out.

The government knows the gravity of the situation, but yet it was taking a lot of time in taking corrective measures, said a leading re-rolling mill owner.