Asphalt production expected about 299,000 metric tons in Pakistan: World Bank

Asphalt production is expected to remain at around 299,000 metric tons (MT) in Pakistan, while the total asphalt requirement is estimated to be between 395,000 MT during 2005, and expected to increase to 438,000 MT by 2010, said a study of South Asia Sustainable Development Unit (SASSD) of World Bank.
Commenting over the "Possible Shortage of Asphalt", World Bank study mentioned that the total estimated demand, asphalt requirements for infrastructure projects under the federal and provincial governments over the next five years are estimated to vary from approximately 246,000 MT during 2005-06, to approximately 277,000 MT during 2009-10. In addition, other stakeholders such as city district governments, the housing sectors, township developers and others are estimated to require between 150,000 to 160,000 MT during the 2005 and 2010 period.
Study statistics revealed that the demand supply gap is estimated to be between 96,000 to 140,000 MT per year over the next five years. The shortage of bitumen is reported to have already become a foremost issue with several on-going projects suffering delays because of the non-availability of bitumen for road works in the country.
All Pakistan Contractors Association (APCA) is reported to be engaged in formal talks with the Federal Minister for Communications, FBR and other concerned departments to address the crisis situation in bitumen supplies. A proposal has been submitted to allow import of bitumen from all countries including India, and to reduce the duties and tariffs to control the price.
Cost of local bitumen is Rs 23,000/MT while imported is Rs 30,760/MT during 2006-07. Availability of asphalt could be further affected as exports to Afghanistan increase during the coming years. Study mentioned, "Cement Availability Doubtful unless Capacity Expansion Programs Materialise".
The country produces about 23 million MT of cement of which about 10 percent is exported. According to industry estimates, out of the remaining amount, 50 percent is consumed by the housing sector, 20 percent by the industrial sector, and the rest is available for public sector projects.
Cement demand for the major infrastructure projects under the MTDF is expected to range between 3.3 million MT to 6.7 million MT per year over the next five years, with the highest demand during 2006-07. Local availability of cement for the projects has been estimated at about 3.4 to 4.0 million MT per year.
This projected availability does not account for the increase in demand over the years from other competing sectors such as housing, which are likely to experience enhanced growth rates and any increased demands from projects in Afghanistan.
Though capacity enhancement has been planned over the next few years in the industry (42 million MT installed capacity by 2009), nevertheless, the import of cement is likely in the short term of around 2 to 3 million MT to meet the increase in demand.
Supply of Quality Billets and Overall Steel Shortage is also a Serious Concern, WB mentioned and added that the gap between domestic production and demand, and the availability of quality billets for producing reinforcement bars appears to be of concern.
Total consumption in Pakistan was estimated at 4.7 million MT during 2004-05, with Pakistan Steel Mills (PSM) producing about 1 million MT of quality steel, while the other local re-rolling and smelting mills (which use imported scrap) produce about 2.3 million MT of steel.
The balance requirement of 1.4 million MT is met through imports. The estimated import requirement for steel over the MTDF period varies between 2 million MT during 2006-07 to 3.0 million MT during 2009-10.
Statistics shows the projected shortfall in overall steel production, which may have to be met through imports. Besides, the overall shortage of locally produced steel products, the main concern for the construction industry is with respect to the production of quality rolled billets and long products. The PSM produces about 0.3 million MT of steel billets while the demand for long products was about 2.5 million MT in 2004-05.