New Peak in Steel Bar Prices

Prices of steel bars reach a new high.

KARACHI: According to the manufacturers of steel bars, the lack of raw materials and the current state of the economy are to blame for the price increase of Rs12,000 per tonne that brought steel bar prices to an all-time high of Rs288,500 per tonne.

Dealers in the Lahore region have been informed by Amreli Steel Limited (ASL) of a new pricing of Rs 288,000 per tonne for 9.5-10mm size and Rs 286,000 for 12mm and above size.

As of February 2, the rates for steel bars in the 9.5–10 mm and 12 mm and above sizes in the Islamabad region are Rs288,500 and Rs286,500, respectively. Due to a lack of raw materials in the nation, the company informed its clients that it would not be accepting any new orders.

Rebar prices will increase by Rs12,000 per tonne starting on February 3, according to Mughal Steel. As of February 3, Union Steel informed its business partners that it would not be accepting any new orders.

Altaf Tai, the chairman of the Association of Builders and Developers, claimed that due to the continually rising costs of construction materials, particularly steel bars, builders and developers had to halt projects costing billions of rupees and thousands of people had lost their employment.

In order to diffuse the current situation, he pleaded with the government to permit the import of building materials from neighbors on the basis of barter. Otherwise, he warned, builders and developers would be forced to relocate their investments abroad, which would be bad for Pakistan's economy.

Cement

Cement domestic sales rose by 5.24 percent in January, but the total amount of local dispatches declined by 14 percent to 23.62 million tonnes in the first seven months of 2022–23.

Cement shipments, including domestic and international shipments, rose 1% in January to 4 million tonnes from 3.96 million tonnes.

The All Pakistan Cement Manufacturers Association (APCMA) reports that domestic cement sales increased by 5.24 percent in January from 3.41 million tonnes to 3.58 million tonnes. From 551,006 tonnes in January 2022 to 418,067 tonnes in January 2023, exports fell by 24.13 percent.

Total cement shipments—both domestic and international—during the first seven months of 2022–23 were 25.77 million tonnes, a decrease of 18 percent from the same time the previous fiscal year.

Domestic sales decreased by 14% during the same period last year, falling from 27.47 million tonnes to 23.62 million tonnes.

As volumes decreased to 2.15 million tonnes in the first seven months of 2022–23, exports likewise decreased by 45.4 percent.

According to an APCMA official, the cement industry has been negatively impacted by the recent, ongoing political unrest and its negative repercussions on the economy. He stated that the difficulty in issuing letters of credit (LCs) for coal, replacement parts, and other consumable items necessary for the efficient running of plants is posing a number of challenges for cement manufacturers.

He asserted that in order to prevent any supply problems and factory closures, the government must make sure that LCs are opened on time.

According to the most recent reading of the Sensitive Price Indicator (SPI), the average retail price of cement increased by 1.68 percent, to Rs1,060 per 50kg bag, for the week ending on February 2. For the week ending on February 3, 2022, the typical cost was Rs735.

The decline in cement sales over the past seven months, according to Sunny Kumar of Topline Securities, has been attributed to a slowdown in construction activity, a general economic downturn, and rising construction expenses.

Due to the recession in the global economy, rising interest rates, and unfavorable export pricing, exports are still on the decline. He claimed that further recovery is predicted. The pace of flood restoration projects will go up as the nation gets ready for both the general election and the end of the winter season. He said that falling coal prices may also benefit the sector's margins in the future.