Pakistan Steel Mills (PSM) on Friday announced to reduce prices of steel products by up to Rs 7,000 per metric ton aimed at rationalising with international market prices. Dealers said that declining price trend in the world market has forced the country's largest steel producing plant to cut its all products prices to compete with imported material.
"This is the third reduction in the steel prices by PSM during this month as earlier on August 5 and August 19 PSM reduced price by Rs 1,000 per ton to Rs 5,000 per ton to enhance its sales in domestic market. However, the declining price trend in the international market and lower sales, forced PSM management to announce another cut in the steel prices," they added. Steel prices in the world market declined sharply by 40 percent and presently Hot Rolled Coiled (HRC) is being sold at $290 per ton down from $500 per ton previously.
Massive steel import from China, NAB cases against PSM dealers and under-invoicing are same of other reasons, due to which PSM is unable to sell its products in the domestic market, they added. They said that some of steel dealers were reluctant to business with PSM as they were already facing cases instituted by the NAB.
Sources said that despite getting over Rs 18 billion bailout package from the federal government, the country's largest steel producing plant has failed to enhance its production and sale. Even PSM management has failed to implement its own business plan submitted to the federal government for bailout package and even couldn't reach breakeven level. "Therefore, PSM management is making efforts to sell its products at lower prices aimed at generating funds for salaries," they added.
According to details, PSM has reduced the prices of all products by Rs 3,000 per ton to Rs 7,000 per ton to compete with imported products in the domestic market. Prices of Galvanised products (different grades) have been reduced up to Rs 5,000 per ton and price of up to 0.55 x 915/950/1220 galvanised declined to Rs 76,300 per ton (excluding taxes).
A cut of Rs 7,000 per ton has been announced for Cold Rolled Coiled and price of up to 0.55 mm x 915/1220/950 product declined to Rs 60,700 per ton (excluding taxes). Hot Rolled Coils prices were reduced in different grades ranging from Rs 3,000 to Rs 4,000 per ton for domestic market. With current cut, price of HHRC 2 mm x1000/1220 stood at Rs 48,600 per ton (excluding taxes). Dealers said despite a massive decline of up to Rs 7,000 per ton, PSM products prices are still higher than imported steel products. "Although prices difference has reduced significantly, still PSM products are expensive by Rs 2000 per ton as compared to imported products," they added.