Manufacturers in the domestic steel industry raised steel plate prices for the second time in the current month of April following the depreciation of the rupee and passed on the price pressure to the downstream industry, such as the automotive and appliance segment.

Players in the flat steel industry have raised the price of Cold Rolled Coil (CRC) from about Rs 4,000 per ton to Rs 227,500 per ton. They have also increased the tariffs for hot-dip galvanized (HDGC) coils by around 4,000 rupees per ton to 238,800 rupees per ton effective Friday, according to Topline Research analyst Mahroz Khan.

This was a second price hike in April and took the cumulative monthly increase to Rs 9,000 per tonne, he added.

Industry officials, who spoke on condition of anonymity, also confirmed the rise in prices for flat steel products.

International Steel Limited (ISL) and Aisha Steel Mills Limited (ASML) are the two major manufacturers of steel products also listed on the Pakistan Stock Exchange (PSX). Additionally, a few unlisted players have also increased their prices.

CRC and HDGC are mainly used in the manufacture of cars, motorcycles, pipes, refrigerators, air conditioners and other electrical and electronic products, we learned.

“The depreciation of the rupiah is the main reason for the surge in prices of steel products,” Khan said in an interview with The Express Tribune.

Pakistan imports raw materials, such as hot rolled coil (HRC), to manufacture flat steel products. Therefore, appreciation or depreciation of the rupee has an impact on their prices in the country.

Cumulatively, the rupee has depreciated by more than 17% to 184.68 rupees against the US dollar in the interbank market during the current financial year to date (July 2021-April 2022).

Another analyst noted that the rupee rallied 1.9% to Rs184.68 on Friday after falling to a record low of Rs188.18 a day earlier. “The industry could consider a downward revision in steel prices if the rupee maintains its upward trend against the greenback. It has also revised prices downward in the past.

Steel prices have increased significantly in recent years. Rising prices could reduce demand for the products, he argued.

In recent weeks, automakers have also hiked prices several times, ranging from thousands of rupees per unit to millions.

An official from a major rebar manufacturing company in Pakistan said the price of scrap metal had more than doubled to $680 a ton in the international market from around $300 a ton a year ago. . “We fear to soon reach 700 dollars per ton.”

In addition, the steel industry remains a major energy consumer, as the manufacture of steel consumes a lot of electricity. Consequently, the increase in electricity and gas prices has also increased the cost of doing business for the country’s steel producers.

Amreli Steel Limited, which manufactures long steel products like rebar and billets, said in a brief statement late last month that “due to the continuing and unprecedented rise in the cost of scrap Over the past month, with the increase in the rupee-dollar parity and the increase in the cost of energy, we can no longer absorb these huge price fluctuations in the international market.

To continue supplies and avoid booking closures, the company’s new rebar booking rates from 28 March 2022 are Rs 216,000 per ton for size (9.5/10mm and 12 mm) and Rs 214,000 per ton for size (16mm and above), he added.

Rising prices for rebar and other construction materials like cement have caused a 15-20% slowdown in construction activity in the past three to four months in the country, a senior official said recently. head of Amreli Steel at The Express Tribune.

Published in The Express Tribune, April 9^and2022.

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