Decision on import of iron scrap, billets averts crisis

The timely decision on import of iron scrap and billets has averted a major crisis as Karachi Steel Mills (PSM) was not meeting the industry''s demand. According to steel industry sources, Pakistan Steel Mills is not supplying billets to the local steel industry for the last three months and the manufacturers were meeting their 100 percent demand from imported raw material.
Ukraine and Romania have emerged as major source for Pakistan''s steel industrialists to get scrap and billets.
Sources said the importers daily get around 0.2 million tons imported scrap and billets to meet their enhanced demand.
They claim that any shortage of scrap and billets could push up steel rates considerably in the local market to hit all stakeholders below the belt and create even worse situation than 2004 when steel prices on average stood over Rs 50,000 a ton.
Pak Steel Mills contributes 24 to 30 percent of total billets consumption and the industry gets the rest of the supply from either local sources or from international market.
An Islamabad-based steel industrialist said that if the government had not taken bold step to allow import of raw material to private sector during the last two years, when Pak Steel supply was non-existent the country would have been in serious crisis on account of steel.
They appreciated government move to cut down duty on import of scrap and billets to provide an additional channel to the manufacturers when Pak Steel suspended supply. The steel industry has recorded 22 to 25 percent increase during last two years and its going to maintain upward growth in the coming years to meet the demand of housing and construction sector.
The demand for the steel has gone up considerably due to quick surge in construction and housing sector over the last few years.
When contacted, Colonel Hafeez, in charge of PSM''s regional office in Islamabad, said that Pak Steel unit, which produces billets, was not functioning a few weeks back due to repair work but since work is over now it was supplying billets to the market as routine. He in particular mentioned some categories such as 60 grade and grade 1 and 2.
He claimed that the news of non-supply of raw material was baseless and rumour.