Sales of PSM products decline

Pakistan Steel Mills is facing a new challenge of slow sales because of massive imports and a decline in steel prices in the world market, which forced the country's largest steel making plant to adjust prices of its products 15 times during this calendar year. The situation has thwarted Pakistan Steel Mills' efforts for obtaining raw materials to enhance its production.
Sources said that Pakistan Steel's low production, followed by shortage of raw material has created space in the domestic market. This gap, sources said, had been filled by importers who are taking benefits of unbalanced SROs and smuggled products. They said: "Not only Pakistan Steel but the entire domestic steel industry is being adversely affected by smuggling of steel products," the sources said.
Prices of steel products in the world market has fallen by approximately Rs 10,000 per ton during this year, forcing the country's largest steel making plant to slash the prices of its products nearly 15 times during the period. Normally, prices of Pakistan Steel's products are considered benchmarks in the domestic market because this is the country's only integrated steel plant. However, imported goods were being sold at much lower rates than the ones made by Pakistan Steel.
Pakistan Steel's annual production capacity is 11 million tons, which even is just 20 percent of the country's steel needs. Moreover, Pakistan Steel's production for the past four years had been much below capacity because of non-availability of raw materials. Because of this situation, the sources said, the share of imported steel had gone up 80 percent, while other local steel makers had also increased their share in the local market.
Reportedly, hundreds of thousands of tons of smuggled steel products, brought under the misleading title of 'scrap', were being sold in the country. Additionally, smuggling, depending on a few SROs, and evading taxes, imported products were being sold at prices much below Pakistan Steel's products, sources said.
This has also disbalanced the local market, which was now more dependent on imported material, resulting in the expenditure of billions of dollar on import of steel products. Source said that Pakistan Steel's losses could be reduced by enhancing its sales and sales "will improve if the government strictly monitors imports" and took action against the illegal import of steel products.