PSM products: reason behind lower sales identified

Privatisation Commission has reportedly termed the disparity in prices of imported steel products, especially those from China, the principal reason behind difficulties in the sale of finished products of Pakistan Steel Mills (PSM), it was learnt.
Sources said that the issue of disparity in prices of local and imported steel products was highlighted by the Privatization Commission in a proposal submitted to the Economic Co-ordination Committee (ECC) of the Cabinet to impose a 10 per cent Regulatory Duty (RD) on the import of Hot Rolled products and Pipes of PSM. An official close to Finance Minister Ishaq Dar said that Privatisation Commission contended that PSM was facing serious difficulties in the sale of finished products on account of a growing disparity in the prices of imported steel products, especially those from China. PC submitted to the ECC that several countries including Turkey, the EU, the US, Philippines, Vietnam and Malaysia affected by Chinese exports, have levied special duties up to 40% of the value while other countries have placed non-tariff barriers.
The ECC was further informed that PSM was, at present, running at 50% production capacity; and it was committed to attaining 77% break-even production capacity by April 2015. It was the only manufacturer of Hot Rolled (HR) Products, an item which generates 80% of PSM revenues. Disparity in tariff, however, is seriously affecting its main sales revenue. Privatisation Commission proposed that a 10 per cent RD may be levied on hot rolled, pipes, and all such imported products. The levy will help PSM in its revival and lead to an annual foreign exchange savings of approximately Rs 40 billion, the PC added.
The ECC meeting on March 18 2015 considered and approved a proposal of Privatisation Division for the "levy of 10% RD on the import of Hot Rolled Products & Pipes of Pakistan Steel Mills (PSM)" and approved: (i) imposition of 12.5 per cent PD on import of HRC, excluding imports of HRC by manufacturers of CRC under Sr. No 41 of SRO 565(1)/2006 dated 5-6-2006, to support local industry; (ii) imposition of 12.5 per cent RD on the import of Tubes & Pipes PCT to maintain the existing tariff spread between raw material and end products. The RD would not be levied on the import of Galvanised Steel Tubes (PCT 7306.9000) and metals shells (PCT Heading 7304.9000) under Sr. No 8 & 51 of SRO 565(1)/2006 dated 5-6-2006 respectively to support local industry; and (iii) a levy of 15 per cent RD on the import of pipes to provide protection to the local industry.