KARACHI: Pakistan imported $2.1 billion worth of iron, steel and scrap during the first seven months of the current fiscal year, depicting 18 percent year on year growth mainly due to fast recovery in demand after lifting of lockdown, analysts said.
The country imported $1.8 billion of iron, steel and scraps during the corresponding period a year earlier, according to the Pakistan Bureau of Statistics.
Analyst Ahmed Rauf at Sherman Securities said restrictions on movement between February and June 2020 due to COVID-19 led to sharp declines in steel and scrap inventories of local manufacturers.
“Subsequently, after the lifting of restrictions, scrap and steel imports rose in 3QCY20 as steel producers looked to increase their inventories. Moreover, government’s initiative to increase construction sector activity also increased demand for steel in the country,” Rauf said. Tahir Abbas, director Research at Arif Habib agreed that construction activities following opening of the economy pushed the steel imports in the country.
“The demand from government projects also increased the demand of the steel whereas local milling units also geared up imports of raw materials,” Abbas said.
In January, iron, steel and scrap imports surged 35 percent year on year to $339 million, according to the PBS.
Abdul Azeem, director Research at Spectrum Securities said steel demand is increasing due to resumption of construction activities.
“Surge in imports of steel scrap could be possibly due to the rising cost of steel scrap,” said Azeem. “Production is picking up and reaching towards pre-COVID levels, which could push the price in the future.” Mehroz Khan, research analyst at Pearl Securities said steel and scrap prices skyrocketed $132/metric ton and $175/metric ton and closed at 685/metric ton and $424/metric ton till December-end on account of economic recovery. Large scale manufacturing posted double digit growth which reflects increased industrial activity.