‘Steel shortage’: Manufactures urges SBP to open LCs

KARACHI: Pakistan Association of Large Steel Producers (PALSP) has expressed concern over the shortage of steel in the country, urging the State Bank of Pakistan (SBP) to open letters of credit (LCs) for the import of essential raw materials, ARY News reported on Monday.

The steel manufactures penned down a letter to State Bank of Pakistan (SBP), stating that the situation has reached a critical level, with imports for the first seven months of fiscal year (FY23) down by 40% from the same period last year.

The letter pointed out that the imports of raw materials have reached the lowest level in five years. As a result of the shortage of raw materials, the steel industry can only operate at 30% capacity utilization levels, and the situation is expected to worsen in the coming months.

It added that the shortage has also led to an increase in prices, which has affected the construction industry and caused delays in major infrastructure projects.

The manufacturers urged the SBP to take immediate action to open LCs to ensure the availability of raw materials for the steel industry.

Earlier in Feb, it was reported that the steel bar prices crossed Rs280,000 per tonne after a massive rupee devaluation and rising prices of raw materials in Pakistan.  The price of steel reached all-time high leading to a slowdown in the construction sector.

According to the president of the All Iron Steel Merchants Association Hamad Poonawalla, the price of steel is surging due to the devaluation of rupee against the dollar.

Poonawalla further said the local production of iron is not sufficient to meet the country’s needs due to the closure of Pakistan Steel Mills.