Steel prices forge ahead as input cost climbs

KARACHI: As the prices of steel and other raw materials continue to forge ahead, local industry, feeling the heat of increasing cost, has passed it on to the already inflation-hit consumers, The News learnt on Tuesday.

The International Steels, Aisha Steel, and Hadeed Pakistan have increased their prices yet again by Rs3/kg from Monday, November 8.

This is the 5th such increase by steelmakers since May 2021. It brings the total hike to Rs36/kg in the last six months only.

The price of steel that was around Rs109/kg in January 2020 has increased by almost Rs100/kg in November 2021, which shows a significant jump of almost 92 percent.

Steel is a key input material used by many industries including construction, electronic appliances and spare parts, auto and parts, and other industries specialised in building machinery of various kinds.

With an increase of over 92 percent in the prices of these raw materials in just one year, the manufacturing industry in Pakistan is finding it hard to counter this blow right after the recession after Covid-19 outbreak.

According to industry sources all of the iron ore and steel scrap for steel re-rolling mills in Pakistan is imported. The prices of steel in the international market are now falling. Unfortunately, the local steel manufacturing industry is not willing to share the impact of the lower input cost with the local industry.

This is especially hurting the manufacturing industry which is forced to use local steel as there is an additional duty and anti-dumping duty on cheaper imports. This is resulting in high cost for local manufacturing and translates into a high cost for the consumer.

“Local industries have not yet recovered from high inflation and worse economic conditions amid the pandemic, while the continuous rise in the prices of raw material and petroleum products, rupee depreciation and high inflation rate is adding to their woes,” said SM Ishtiaq, CEO of SM Engineering.

Despite this situation, he added, the local manufacturing industries had been trying hard to absorb the shocks of increase in cost and not pass on to the consumers.

“But it seems that price hikes in different products are inevitable in the near future. The consumer in Pakistan is bearing the brunt of steep increase in raw materials of industrial products,” Ishtiaq added.