The government has been urged once again by the Pakistan Association of Large Steel Producers (PALSP) to assist the steel industry in overcoming the crisis brought by letters of credit (LCs) issue.
What you need to know:
The PALSP leadership voiced their opinion during an emergency meeting to address the current situation. The members voiced concern that if the issue is not handled within four working days it will result in the permanent closure of factories. This might result in a significant loss of industry and up to 7.5 million can lose their jobs.
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Why it matters:
The leadership of the steel industry expressed deep concerns about the current industrial and economic situation. The crisis is characterised by declining foreign reserves, restrictions on LCs, a continuous depreciation of the rupee and intense inflationary pressure.
44 linked industries were listed as being dependent on the supply of steel. The steel industries would suffer catastrophic and permanent harm if factories were forced to close. It would be impossible to restart the affected units due to the lack of raw materials.
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The import of steel scrap fell by a record-breaking 55 percent year over year (191,000 MT) in December. This marked the biggest decline recorded in the previous ten years.
What’s next:
Due to this, the industry has warned that there will be serious shortage of steel in the upcoming months of February and March. The State Bank of Pakistan (SBP) administrative limits will cause steel rebar prices to exceed Rs. 280,000 per tonne, they further cautioned.
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