Steel melters send SOS call to government

The Pakistan Steel Melters Association has sent an SOS call to the government for saving the industry from collapse by resolving the issues being faced by it in shape of rise in scrap rates internationally, unbridled increase in electricity tariff, rupee devaluation and drastic increase in sales tax.
The Association in a recently-held meeting of its executive committee observed that the steel melting industry was severely hurt by four major decisions taken by the government.
If immediate attention is not paid, the industry may suffer badly, it warned. The meeting observed that steel prices because of these four obstacles may rise to the extent where it may go beyond the purchasing capacity of common man.
Drawing the attention towards these issues, the meeting dubbed drastic increase in sales tax like a bomb shell on the industry. It claimed that steel bars will be costlier by Rs 20000 per metric ton. Pakistan is a price conscious market and the domestic population will not be able to afford it.
Sale of steel goods will be depressed and the industry has to bear heavy losses. This will also lead to loss of huge revenue being collected by the government from the industry. The meeting proposed that the government should bring down the sales tax in the larger interest of the domestic and industrial sector.
Most of the working capital remains in credit and with sudden heavy devaluation of rupee steel melters are facing huge devalued credits. This is a big loss to the steel furnaces and industrial sector is experiencing a loss of Rs 6000-7000 per ton.
They further said that steel melting furnaces utilize electricity in huge quantity. A basic steel melting furnace of 10 ton capacity utilizes 2.4 million units on monthly basis. It urged the government to bring down electricity rates as these are higher in Pakistan as compared to the whole of the region.
The meeting further said that 90 percent of scrap being utilized by the steel melting furnaces is imported. Drastic increase in scrap rates internationally has subdued the production of our steel melting furnaces. Rupee devaluation has further complicated the situation, the meeting observed, and appealed the government to look into the issues sympathetically.