CEMENT AND STEEL PRICES CONTINUE TO INCREASE

Cement and steel prices

CEMENT AND STEEL PRICES INCREASE

Due to COVID-19, just like other commodities, cement and steel prices have also increased unexpectedly. As a result, it is slowing down the construction activities in Pakistan.

Amreli Steels has announced a hike in the price of rebars by RS5000 per ton. In addition to an increase of Rs5000 per ton announced earlier during the month, said JS Global analyst Arsalan Ahmed in comments to The Express Tribune.

“It appears that they took the decision because of the rise in global scrap prices by almost $60 (Rs 9,600) per ton,” he said. “After the recent increase, the price of rebars of the company stands at Rs128,000 per ton.”

Pakistan Association of Large Steel Producers Secretary General Syed Wajid Bukhari said that the price of scrap had soared from $300 per ton in early November 2020 to $450 per ton now due to shortage in the international market.

“The price has risen exponentially. Moreover, several local mills have stopped buying raw material for now,” he said.

Dawood Hercules Corporation Research Lead Karim Punjani said owing to the rollout of Covid-19 vaccines, the international prices of the two commodities had soared.

“Companies expect demand for their products to skyrocket.  Hence the prices of inputs, including coal and steel scrap have hiked across the world,” he said.

Prior to the introduction of vaccines, Covid-19 was denting the global economy, he said. However, after the invention of vaccines,people think of Covid-19 as a disease, not a pandemic. 

INCREASE IN CEMENT AND STEEL PRICES

“This has led to a significant rise in demand,” he said. “Before lockdown, Coal was priced at around $80 per ton. However, when the lockdown was lifted, the prices decreased to $65.”

Given the current jump in demand, the price of coal has jumped to $90 per ton, said Punjani.

He added that local demand for steel and cement also swelled following Prime Minister Imran Khan’s announcement of a relief package for the construction sector.

He pointed out that companies are not absorbing the hike in prices. Instead, they were passing on the impact on consumers.

“A seasonal impact is also being seen with regard to coal prices,” he said. “In winters, hydro power plants, observe maintenance shutdowns and countries generate electricity through coal and LNG plants.”

However, some builders have a different opinion about the hike in prices of cement and steel. As they claim that the producers are taking benefit of the increase in demand for the two commodities.

“It is a conspiracy against Prime Minister’s Naya Pakistan Housing Scheme as well as the national economy,”. Association of Builders and Developers of Pakistan (ABAD) Chairman Fayyaz Ilyas said in a statement issued in the backdrop of a sudden rise in steel and cement prices.

 CONSTRUCTION SECTOR

He urged the Federal Government to take action against the industries. Which was trying to ruin the steps taken by the government. It is necessary to revive the national economy.

Even though most of the raw material is local, cement and steel manufacturers have raised prices of their products to Rs 625 for a 50 kg bag of cement and Rs 126,500 per ton of steel, which is not justified.

He was of the view that the cartel of cement and steel manufacturers seemed determined to crush the construction industry.

Cement and steel are the main inputs for the construction sector. However, manufacturers of the two products are busy minting money without any justification. Moreover, authorities are helpless to take any steps against these cartels.

Ilyas pointed out that the construction industry was the second largest employment-generating sector after agriculture.Hence,it was the reason Prime Minister Imran Khan was prioritizing the segment. He added that the PM launched the Naya Pakistan Housing Scheme for people, who would otherwise be unable to own homes.

However, steel and cement cartel are spoiling the efforts of the prime minister. Consequently, causing a dent in the national economy.

For more news and articles, please visit https://www.landster.pk/blog/

 

 

 

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