KARACHI, Oct 29: Despite sharp fall in world steel prices Pakistan Steel Mills and importers of steel have not reduced prices of steel products, local auto vendors said.

The PSM is reported to have increased the prices of its products three times in the last three to four months.

Two senior officials in the PS, who asked not to be named, said that currently, there was no move to revise steel prices in view of falling global rates. “It will take time for making any cut in prices as a meeting will be held among top officials to discuss this issue,” they added.

Meanwhile, iron and steel merchants and a local tractor maker say that the prices of steel products (PS and imported items) may come down in one or two months as much depends on the stability in the rupee dollar parity.

The rupee was trading at Rs67 to a dollar three months back as compared to Rs82, while it was available at Rs62 to a greenback earlier this year.

General Manager Marketing Balochistan Wheels Shaikh Mohammad Iqbal said that the company was still purchasing steel products at Rs81,000 per ton despite worldwide decline in steel prices to $700-750 per ton in the last few months from $1,300-1,400 per ton.

He said his company had approached the PSM officials to revise the prices but its officials did not give a clear answer saying that the mill cannot reduce the rate immediately.

He was of the view that cut in prices by PSM will reduce the production cost of tractor and car industries. Besides, it will also cut the construction cost if the prices of billets are reduced. He urged the government to intervene and ask the PSM management to pass on the impact of falling global rates to the consumers immediately.

Former chairman Pakistan Association of Automotive Parts Accessories Manufacturers (Paapam) Mohammad Ashraf Shaikh also endorsed the view of Shaikh Iqbal and said the association will urge the PSM to consider revision in prices.

Chief Executive Officer of Millat Tractors Sohail Bashir Rana told Dawn from Lahore that the PSM and the importers had actually made forward buying of steel products at higher rates. “It may take one or two months more for any reduction in steel products’ prices,” he added.

However, he said in case the steel products’ prices come down then the local industry would consider price cut to some extent provided that the rupee maintains its strength or remains stable against the greenback in coming months.

He said that 25-30 per cent rupee devaluation against the dollar has virtually offset the impact of falling world prices on steel products. Sohail said that the local tractor industry would try to avoid making another increase in prices due to losing value of rupee.

The CEO recalled that the local industry had increased the tractor prices by eight per cent in Aug/Sept. In July this year, the industry had raised the prices by five to six per cent owing to rising prices of local components, higher utility charges, increase in transportation cost due to diesel price hike and labour charges.

The 50 horse power (HP) tractor has achieved 91 per cent deletion, while big engine capacity power tractor has 78 per cent locally made parts and accessories.

President Karachi Iron and Steel Merchants Association Shamoon Baqar Ali was of the view that steel products’ prices had declined by 30-40 per cent in world markets from August till now.

Consumers are likely to witness some price reduction in imported steel products after six weeks as the transit period of raw material and finished products from various foreign destinations take at least 45 days, he said.

Shamoon said shipments arriving by end of October had been booked at 25 per cent low rates as compared to September. Even the shipments, which had arrived at end September were also booked at low price as compared to August.

He said consumption of iron and steel is estimated between 5 to5.5 million tons per annum of which PSM produces one million tons of products, while the re-rolling mills produce 1.5 million tons per annum and the rest of demand is met through imports.

Chairman Association of Builders and Developers (Abad) Babar Mirza Chughtai said that Pakistan Steel, which has been making immediate increases in its product prices due to rising steel prices in world markets, should now come out with price reduction after drop in world steel prices.

When the PSM will announce a price cut, the market players will follow the suit, he said adding that steel bar (sarya) prices had been hovering between Rs66,000-68,000 per ton and it enjoys 30 per cent share in the total construction of any project.