The Pakistan government has extended its lockdown by two weeks, albeit by granting relaxations for some industries. Industries supporting the construction sector could open immediately in the Phase-1. This announcement is likely to drive demand for steel in the near term.

 

At present, a few major steelmakers like Amreli Steel or Mughal Steel have scaled down their production to match the decline in local demand. Some mills, however, restocked ferrous scrap for their upcoming production requirements amid a fall in global scrap generation rate and the resulting supply crunch. Shipbreaking activities at Gadani port stay shut affecting domestic scrap generation.  

 

Pakistan mainly imports ferrous scrap from Europe and the UK. Other supplier countries include the UAE, Kuwait, North America, South America and South Africa.

 

The country’s annual crude steel production is around 5.5-6mn mt and the finished steel demand is nearly 7.5-8mn mt. Activities could, however, pick-up slowly ahead of the Ramadan month beginning April 24. Every year, the trade usually slows in the period with workers and casual labourers returning to their hometowns for festivities. 

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