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Prices of mild steel increased by Rs 2,000 per metric tonne - Naveed Yaseen - 07-07-2009 05:12 AM
By Moonis Ahmed
KARACHI: The prices of mild steel bar—the essential construction industry material—have shot up by Rs 2,000 per metric tonne in the domestic retail market, Daily Times learnt Monday.
After this upsurge, the prices of mild steel bar (sariya) has reached to Rs 49,000 per tonne, which was earlier tagged at Rs 47,000 per tonne.
Dealers said that mild steel bar prices have been raised following an increase in raw material and finished products’ prices by the Pakistan Steel (PS) and shortage of steel products due to prolong power outages in the Punjab region.
Electricity load shedding has halted regular production at many steel re-rolling factories, triggering an increase in prices of steel products.
“Because of prolonged power outages the process of melting steel products gets too long and that ultimately enhances cost of the process,” said an industry official. He said that this practice not only pushes up the cost of the steel re-rolling and melting industry, but also enhances the ratio of wastage, which is ultimately passed on to the consumers.
PS had raised the prices of some of its products ranging between Rs 500 to Rs 1500 per metric tonne few days back and the impact of that price hike is being felt now, dealers added.
“Another reason behind this upsurge is that the government has cut the power supply quota by some 50 percent for the steel units of Punjab and the mills are being operated on 20 percent capacity here,” said an office bearer of Pakistan Steel Re-Rolling Mills Association Punjab Zone.
He said the prices of different steel products across Punjab have already increased by Rs 6,000 per metric tonne as the market is running short of materials.
Traders are of the view that due to shortage, the demand of steel products has been diverted to the markets of Karachi from Punjab. “Traders of Punjab are in contact with us and buying material from our markets,” said a Karachi-based dealer.
He said the steel markets are running short of materials in Karachi due to sudden and extraordinary demand that is being received from the Punjab region.
On an average, 150 daily-wagers work at a steel re-rolling factory and in total over 80,000 workers are employed on which around 400,000 people depend. The stoppage of production has rendered the workers unemployed, causing resentment in the society.
At present, around 40 industries are linked with the steel re-rolling industry including the construction industry and auto parts’ makers, which provide employment to a large number of people. In this scenario, the allied industries will also suffer, leading to further unemployment in the country.
http://www.dailytimes.com.pk/default.asp?page=2009\07\07\story_7-7-2009_pg5_10