The domestic prices of steel products have dipped below the Rs. 250,000 per ton mark due to a sudden drop in the cost of raw materials in the international market.
Domestic steel producers — International Steels Limited (ISL) and Aisha Steel Mills Limited (ASL) — announced a big decrease in the prices of Cold Rolled Coil (CRC) and Hot Dipped Galvanized Coil (HDGC) by Rs. 12,000 per ton on Thursday, according to JS Research. Effective from 17 August 2022, the new price for 1 mm CRC is Rs. 230,550 per ton, and Rs. 237,900 per ton for HDGC.
Lately, the construction industry has been struggling with pricing its housing units due to massive hikes in project completion costs, with steel prices increasing significantly in the past few months alone.
Today’s decrease in steel prices is likely due to the cost of scrap coming down in addition to the retardation in domestic demand. Additional research suggests the rupee appreciation observed in the past 10 days also facilitated today’s sharp reduction in domestic steel prices.
Steel prices initially began to rise in December 2020, owing to an increase in the global marketplace which was fueled by the restoration of economic activity throughout the world following the lifting of lockdowns.
Another issue for steel companies was the high freight cost of imported containers, which had persisted in the past two years largely as a consequence of the pandemic. Following the outbreak of COVID-19 in Pakistan, several major firms initiated real estate projects, and despite the seesaw trends that followed, the market has welcomed today’s drop in steel costs.