Pakistan’s long steel sector is bracing itself for a potential shortage of raw materials in anticipation of steel scrap prices hitting a record high. A move that poses a significant threat to the industry’s operations and profitability.
With Letters of Credit (LCs) not being opened, domestic scrap shortage is compounding and is hitting manufacturers drastically, said Syed Wajid Bukhari, Secretary General of the Pakistan Association of Large Steel Producers (PALSP) in a statement.
JS Global Steel Sector Analyst Waqas Ghani Kukaswadia attributed the long steel sector’s crisis to the sharp depreciation of the rupee against the dollar, rising inflation, and impediments on the import of raw materials due to LC restrictions.
Apart from the delayed production caused by the scarcity of imported raw material, he said, “Some steel companies have also suffered losses on account of demurrages paid for containers withheld at ports.”