ISLAMABAD, FEB 15 (DNA) – After drastic increase in the prices of rebars in recent months due to increase in the cost of raw material internationally, the local market is witnessing decline in the prices of rebars. The prices of bars increased in Pakistan as the prices of scrap shot up from USD 350 in Oct 2020 to USD 500 plus in early 2021. The prices of scrap increased due to severe cold weather as well as Covid 19, which resulted in low volumes of scrap collection internationally.
The prices of rebars are expected to shrink further in the coming months to settle down to normal prices as the domestic industry is coping up with the changing dynamics. This declining trend in steel prices is bringing hope for domestic construction industry of the country.
The local steel industry has been through deep crisis in the last two to three years and most of the documented steel sector declared heavy losses in the recent years. However, at that time, the steel sector did not pass on the impact of increase in the prices of rebars. Some of the factors that contributed to this situation were devaluation of PKR, Increase in the interest rates by SBP, and it was coupled with some of the measures taken by FBR in 2019 especially as a result of change of regime from Special Regime to the Normal GST regime (ad velorum) resulting in drastic increase in the GST amount. During these years, the cost of all kind of inputs went up including the the cost of electricity.
Price of steel bars used in reinforced concrete construction peaked almost 20 to 25 percent in the last three months and elsewhere to various degrees. However, the sudden rise was not noticed only in steel rebar price but also an increase was experienced in the other construction items (like cement, pipe fittings, bricks and tiles etc.) as well:
Construction Material Change in Price (Dec 18 – Dec 20)
Steel bars and sheets 23%
Bricks, blocks and tiles 22%
Glass Sheets 7%%
Pipe fittings 32%
Paints and varnishes 15%
Construction input items 23%
(Source: Pakistan Bureau of Statistics Monthly Price Indices)
Now the current trend of shrink in steel prices provides a silver lining. This development will support the NAYA Pakistan Housing Program (NPHP) which will soon be running a pilot project in Punjab. It is expected that the prices of steel will settles in this quarter and is likely to create demand recovery for long steel players.
Please do add the following line in the press release:
The price of rebars that peaked to 140,500/- PKR has now been reduced to 130,500/- PKR.=DNA