Thursday February 02, 2023

Steel prices likely to hike

By Our Correspondent
March 08, 2022

ISLAMABAD: A sudden surge of $120/ton in global prices of steelmaking raw materials has sent shockwaves across the world and Pakistan is also bracing for an impact of Rs20,000/ton increase in local prices, which the local industry says will be passed on to the end consumers.

The prices of primary raw material of steel industry (scrap) have increased by $120/ton from $550 to $670 in a span of few days. This translates in further increase in investments, and also, may translate into an increase in prices of rebars to at least Rs20,000/ton in Pakistan.

According to a statement issued by Pakistan Association of Large Steel Producers (PALSP) on Monday, this is very unfavorable for steel as well as the construction industry as any increase in prices of rebars is likely to suppress the demand of steel in the country.

During the last one year, the prices of scrap more than doubled, which resulted in huge increase in investment as some of the smaller players have already gone out of business. In Pakistan where steel industry is just settling down and has started breathing after

coming out of a crisis-like situation, this alarming development is likely to make the sectormore vulnerable.

One of the major factors behind this development is the war between Russia and Ukraine. After invasion of Ukraine world steel scrap prices soared. This situation worsened the world over with the imposition of sanctions against Russia, which along with Ukraine is one of the world’s biggest producers and suppliers of steel. Both the warring countries account for 74 percent of the world’s wire rod exports and commodity prices are feared to jump beyond current levels.