Pakistan Steel Re-rolling Mills Association Chairman Mian Muhammad Arshad, while expressing his deep concern over jump in the prices of mild steel (MS) billets by Pakistan Steel Mills (PSM), has made an appeal to the prime minister and federal minister for industries to take note of the situation.
In a statement here on Friday Arshad said that Pakistan Steel Mills has increased the prices of mild steel billets by Rs 2,500 per tonne within a fortnight, and when added 20 percent sales tax it amounts to Rs 3000 per tonne, which is unprecedented.
He said that Pakistan Steel Mills, being the sole producer of MS billets in the country, is ruthlessly exploiting this situation knowing that there is shortage of re-rollable steel material, as a result of complete dying down of the ship-breaking industry.
Now in absence of this industry, which supplied up to 80,000 tonnes of material there is no other source in the country to fill this ominous shortfall.
Arshad said that Pakistan Steel has adopted an unrelenting path of prices escalation since July 2002 and since then the prices to-date have been increased by Rs 11200 per tonne, and with the addition of 20 percent sales tax the increase swells to Rs 13440 per tonne.
The prices of steel bars, etc in July 2002 were around Rs 17500 per tonne. The prices will now go up to Rs 32000 per tonne or even higher, going beyond the reach of consumer at large, he said.
This, he added, would also affect the house building activity and developmental projects. If the government failed to tackle the situation, nearly 30 percent down stream industries could receive a stunning setback, he warned.
The Association has appealed to the Prime Minister and the federal minister for industries to take stock of the situation and adopt immediate measures to make possible import of sufficient raw material for the re-rolling industry ie MS billets and rerolling steel scrap.
The government needs to take immediate action in this regard and it should not be delayed till the next budget otherwise by that time most of country's industry will have shut down rendering thousands of workers jobless, he warned.
Arshad added that the annual requirement is 2 million tonnes and three types of raw materials currently are in use while there is critical shortage of two ie the MS billets and ship plate. Pakistan Steel MS billet capacity meets less than 20 percent industry's needs.
Ship-breaking activity, expected to supply over 800,000 tonnes of ship plate, is completely shut now, and only about 60,000 tonnes of ship plate are now available which will last till middle of April next.
Similarly, he maintained, steel ingot production is on the fast decline because of very high international prices of meltable steel scrap and its acute shortage.
About the revival of ship-breaking industry activity, he said it is not foreseeable, putting at risk about 200 of about 300 units of the steel rerolling industry.
Therefore, the best alternative to ship plate is the rerollable steel scrap, abundantly available internationally, generally known as HMS1.
It is need of the hour that the import of re-rollable steel scrap be made feasible by immediately allotting it an ITC/PTC number and prescribing for it the import duty rate of 10 percent advalorem. Failing this about 80 percent of the steel rerolling industry will come to grinding halt by April next, he warned.