Pakistan Steel is seeking imposition of some 25 percent Regulatory Duty (RD) on import of steel products to avoid losses in case of cut in Import Trade Price (ITP), sources said on Monday. They said that the country''s largest steel producer has recently submitted its proposals to the Federal Board of Revenue (FBR) for the imposition of RD on import of all steel products especially flat steel products including Hot Rolled (HR), Cold Rolled and Galvanised Products (GP).
They said that PS proposals have come at a time when FBR was considering cut in the ITP of major steel products including the above quoted three items because of huge fall in prices of the steel products globally. "The PS officials also met chairman FBR twice on this issue during the last four days and strongly demanded for the imposition of RD on import of flat steel products", they added.
Firstly, PS officials met chairman FBR and secretary ministry of industries last Thursday at Islamabad and put proposals, while on Saturday evening Chairman Pakistan Steel Moin Aftab Sheikh at Custom house Karachi personally discussed the issue with chairman FBR Ahmed Waqar and demanded a healthy regulatory duty on import of steel products.
However, sources said that chairman PS has failed to convince the chairman FBR and other participants on the RD issue in Saturday''s meeting. They said that PS management believed that mill''s sales would receive harsh blow and suffer heavy losses if the ITP of steel products would be reduced, as after the cut in ITP, the imported steel products would be available at lower prices as compared to PS prices, which have 20 percent share in overall steel demand.
They said steel prices in the international market are declining for the last few months, therefore steel importers are demanding cut in the import trade price, which was previously raised by the customs following the international trend. Therefore, the PS management is continuously pressurising the FBR not to reduce the ITP or impose the RD on the import of steel products, in case of reduction in the ITP.
They said PS has suggested that FBR should impose a healthy RD of 25 percent, which should cover the cut in the ITP of steel products. At present, valuation of HR stood at 640 dollars per tonne, CR at 702 dollars per tonne and GP at 770 dollars per tonne against the international prices of 340-360 dollars, 350-370 dollars and 360-380 dollars per tonne respectively.
The PS has reduced the prices of its products during the last few months due to the declining trend in the world market and at present steel mills products are more cheaper than imported items. Due to low prices, the PS products are being sold at heavy premium in the domestic market, while mills is facing huge losses and main beneficiaries are steel mill dealers.
In Thursday''s meeting held at Islamabad some stakeholders also had offered to pay a premium of Rs 5,000 per tonne to the PS at the present prices of different steel products. However still PS management has not accepted the side offer.