ACCOUNT PROFILE

Rising steel output lifts Pakistan scrap imports

Posted on 16 September 2021

Pakistan’s semi-finished steel production surged 51% on-year to 4.78 million tonnes in the fiscal year ended 30 June 2021 (FY21), against 3.16mt a year earlier. However, flat steel production plunged 10% to 3.3mt, Kallanish notes.

Pakistani flat steel demand increased owing to high demand for steel in the automotive industry. “Auto assemblers and their vendors consume 15,000-20,000 tonnes/month of iron and steel in different forms which are used in making different parts,” says Pakistan Association of Parts and Accessories Manufacturers Association chairman Abdul Rehman Aizaz.

“Bike production swelled to 2.475 million units, jeeps/cars production rose to 163,122 units, trucks and buses production in FY21 jumped to 3,808 and 570 units, respectively,” he adds.

The nation is dependent on scrap for its steelmaking, owing to which it witnessed a steep rise in steel scrap imports on the back of high production. Pakistan scrap imports rose 21% in FY21 to 4.72mt, against 3.91mt imported last year.

“Steel bar production till 2011-12 was about 3-3.5mt [annually], while the current demand now hovers between 6.5-7mt,” says Pakistan Association of Large Steel Producers secretary-general Syed Wajid Bukhari. “Steel bar demand would soar to 9-10 million tonnes by 2023-24 in view of rising construction activities.”

“The private sector consumes 80% of total steel bar production as compared to 20% by the public sector,” he adds.

Finished long steel production in the nation is booming on the back of infrastructure developments. “A multi-storey high project to be built on a 1,000-yard plot with three floors for car parking requires around 1,100 tonnes of steel bars,” says Hassan Bakhshi, the former chairman of the Association of Builders and Developers.

“Steel bar demand is rising due to high demand in construction projects and out of the total, 80% of construction project work is happening in Punjab [Province],” Bakshi concludes.

Source : Kallanish