The letters of credit (LCs) amid fear of industry closure, the manufacturers have pushed up the price of steel bars to an all-time high of Rs243,500 per tonne citing a continuous increase in raw material prices, supply chain disruptions and soaring production cost.
“Although the ban on imports has been eased as per a circular of the SBP, it is not being fully implemented in spirit,” said AHL.
The domestic steel industry, especially the graded steel (high quality) industry, which heavily relies on the imports of scrap (for the production of long steel) and HRC (raw material for flat steel), remains highly vulnerable.
“Therefore, the restriction on LC opening poses dire consequences for the availability of steel going forward,” said the report.
AHL said that as per its checks local players will run out of steel raw material and become forcefully non-operational if no LCs are opened within the next 30 days.
In another development, the rate of galvanised sheet or cold rolled sheet used in making home appliances and automobiles has been raised by Rs14,000 to Rs280,000 per tonne.
A steel bar dealer said that Faizan Steel increased the 16mm-25mm rate to Rs240,500 per tonne and 10mm-12mm to Rs242,500.
He said that Agha Steel Industries also raised the 16mm-32mm rate to Rs241,500 and the 10-12 mm to Rs243,500.