In the fiscal year, 2021 ending in June Pakistan’s flat steel consumption is expected to surpass 1.2mn mt and reach pre-COVID-19 levels, according to a research company Topline Securities.
Demand outlook in all the downstream industries, including automotive, pipes, drums, appliances, construction, telecom, and agriculture silos is likely to be robust for the next two years. These industries consume flat steel products including CRC and HDGC.
Amid expectations of this demand rise, flat steel producer Aisha Steel, plans to install a new production line taking its annual capacity to 700,000mt. In 2021, the total flat steel manufacturing capacity in the country is set to cross 2.2mn mt.
In the last fiscal year, Pakistan’s flat steel consumption declined by 30pc to 850,000-900,000mt due to the COVID-19 lockdown and the resulting slowdown in the economy. The auto sector struggled with weak demand leading to a sharp drop in flat steel consumption.
Flat steel imports fall
In FY2020, flat steel imports dropped by 38pc to 270,000mt. The country imposed anti-dumping duties on flat products. Domestic flat steel production in the country has increased, resulting in a decreased dependency on imports from 54pc of total consumption in FY2016.
Imports dropped from 629,000mt to 270,000mt in the last four financial years, according to customs data. Pakistan Rupee has depreciated by 34pc to PKR160 against $1. In the coming days, it could result in lowered purchases from overseas markets.
The country reported a rise in steel demand in the construction and auto sectors. Industrial expansion is also likely to boost steel consumption.
In the rural areas, where the economy is driven by agriculture, sales of tractors and construction activity picked up, boosting steel consumption. In the H1 FY21, sales of two-wheelers rose 19pc, and appliance sales have increased 25pc.