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Steel Prices In The Country Rose All-Time High , As Shortage Of Raw Material By Not Opening LCs

KARACHI: The prices of steel rebars rose to an all-time level of Rs 235,000 per metric ton due to shortage of raw material. All leading steel rebars producers, on Tuesday, have announced to increase the price due to exchange rate volatility and shortage of raw material as banks are not opening LCs.

The booking rates of quality steel rebars have been increased by Rs 8,000 per metric ton with effect from 10th January, 2023. The new Ex-Factory booking rates will be Rs235,000 per metric tons for size (9.5/10mm & 12mm) and Rs.233,000 metric tons for size (16mm & above) deform and Xtreme Rebars.

This is the second increase in the steel prices during the last one week as recently mills have raised the prices by Rs 5,000 per metric ton. Cumulatively, steel producers have increased steel rebar prices Rs 13,000 per metric ton in the last one week. Industry sources said that prices are likely to further go up in coming days and likely to touch a level of Rs 250,000 per metric ton in the local market.

They said that the country is facing a serious crisis of foreign exchange and imposed a number of restrictions on the opening of Letter of Credit (LCs) to contain the country’s import bill.

The documented steel sector has made several requests to the Ministry of Finance and the State Bank of Pakistan (SBP) for opening LCs of raw material on priority basis to keep the industries operational.

The steel sector raw material monthly import is almost $150 million and 2.6 percent of the country’s total import bill of July-Oct of FY23; however, it is not included in the priority import list, issued by SBP.

The steel industry is facing a serious crisis of raw material as the banks are not establishing LCs for the import of raw material.

Industry sources said that shortage of raw material will result in imminent shutdown of large steel manufacturers that will directly halt the infrastructure projects of national importance but also cause a domino effect on allied industries including cement and building material resulting in massive unemployment.