Import of hot-roll coils from Iran has been expedited during the last few months and Pakistan has so far imported 70,000 metric tons of hot-roll coils during 2005 to cater to the country''s needs. The trade got started in early January this year when Pakistani importers approached Iran and placed orders of hot-roll coils, importers said.
"Before Iran, we used to import this product from European countries, Canada, Russia, Saudi Arabia, Ukraine and South Africa," said a leading importer, adding now other players including China, Spain, France, Argentina, Brazil, Romania and Indonesia have entered into this market as potential competitors.
Commenting on reasons of this trade, one importer said: "Freight charges are comparatively less as Iran is our neighbouring country and it is easy to trade with Iran rather than European countries".
He added consignments of hot-roll from Iran take four days to reach Karachi from the Iranian port of Bandar Abbas, and they do not have to wait long for their consignments.
"Japan was a potential buyer of Iranian hot-roll coils till December 2004," he remarked and added prior to the start of this trade, Iran used to supply its major stocks to Japan. However, he said, when the United Nations (UN) imposed restrictions on trade with Iran, Japan ended trade with the country.
"We then approached Iran and placed big orders," said a Karachi-based importer. Underlining another reason, he said the price of Iranian hot-roll coil is still very low compared to other countries.
"We are saving $80 to $100 on each ton," he said and added, "the hot-roll coils are being imported from Iran at $380 to $400 per metric ton and it is cheaper compared to other countries as well as prices of Pakistan Steel."
He said the rate of hot-roll coils produced by the Pakistan Steel is still very high as it costs $550 per metric ton without including sales tax. Replying to a query, an importer said it is prerequisite for contractors wining government tenders to use material made by the Pakistan Steel. On the other hand, he said, the PS also offer incentives to those who buy material from it.
He said hot-roll coils are used almost in every industry, including pipe industry and also for the fabrication of water and oil tankers, and pointed out Punjab and Karachi are main buyers of hot-roll coils.