ISLAMABAD: Pakistan Association of Large Steel Producers (PALSP) has rejected allegations leveled by builders and developers regarding price hike of steel bars.
“PALSP out rightly rejects the irresponsible and misleading statements by Association of Builders and Developers (ABAD) representative,” said a statement on Saturday.
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Presently the price of rebars in market range between Rs2,80,000/metric ton to Rs305,000/MT and not the erroneous figure of Rs350,000/MT quoted by ABAD representative which is misrepresentation of facts.
Banning genuine builders from buying steel who have taken billions from potential tenants is an illegal act, by a segment of builders who are acting like a mafia or a cartel, according to the statement.
There are about 400 steel units in the country and no cartelization can take place in such number of units.
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The reality of the situation is that steel sector is facing scarcity of industrial raw materials due to curbs on issuance of LCs.
Consequently, more than 30 per cent units are closed and the ones running are operating on below 50 per cent capacity.
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These units now procure locally generated steel scrap. Due to sudden closure of scrap imports, the local scrap prices have jumped from Rs.120/- kg to Rs.195/- kg. Also the inputs costs of chemicals, gas, power, freight etc., went up by 25-30 per cent.
In this situation, the cost of bars produced increase by over Rs.100/ kg. The steel units are suffering huge losses due low capacity operation and high interest costs.
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The danger is that these units might suffer such huge losses that 20-25 per cent of steel units might not be able to recover from such losses till government gives some special soft term loans. The steel industry has employed over 5 million people and contributes over Rs300 billion to FBR as revenue.
