Ailing steel industry diversifies for survival
KARACHI: Amid large-scale smuggling, mis-declaration, under-invoicing and a demand slump, some key steel manufacturers are diversifying into exports of non-ferrous products (copper ingots) to China for survival.
It has emerged as the fifth largest exporting sector with foreign shipments touching $1.350 billion in FY24, Pakistan Association of Large Steel Producers (PALSP ) Secretary General Syed Wajid Bukhari said.
He said one of the members of the PALSP is the largest exporter of copper and many others are pursuing similar targets. However, he fears that in case unchecked smuggling continues by organised mafias, this would severely damage the exporting ability of copper products and at the same time would endanger their survival.
In a letter to Finance Minister Mohammad Aurangzeb, the association said the country’s steel industry is fighting for sheer survival due to massive rupee depreciation, the highest financial costs and unprecedented power tariffs coupled with a significant increase in input costs.
Many steel mills have shut down their operations and the remaining are working at a small fraction of their capacities and many more are on the verge of closure, he claimed.
Construction activity is at a grinding halt due to the economic downturn, and the steel demand is at the lowest possible level. In this situation, the resumption of smuggling of steel with full might is an alarming development, which is going to create further devastation for the steel sector as well as our economy, he said.
Published in Dawn, March 21st, 2024