The construction sector got the good news after the domestic prices of steel products decreased below the Rs 250,000 per ton mark as a result of a sudden drop in the cost of raw materials in the international market.
According to JS Research, the domestic steel producers including International Steels Limited (ISL) and Aisha Steel Mills Limited (ASL) have announced a huge decrease in the prices of Cold Rolled Coil (CRC) and Hot Dipped Galvanized Coil (HDGC) by Rs 12,000 per ton on Thursday. The new price for 1 mm CRC is Rs 230,550 per ton, and Rs 237,900 per ton for HDGC effective from 17 August 2022.
Recently, the construction sector has been struggling with pricing its housing units because of massive hikes in project completion costs, with steel prices growing significantly in the past few months alone.
Sources reported that the decrease in the steel prices announced is mainly because of the price of scrap coming down in addition to the retardation in domestic demand. The research further suggests that the rupee appreciation observed in the last 10 days also facilitated today’s sharp decrease in domestic steel prices.
Moreover, the prices of Steel initially began to rise in December 2020, due to an increase in the global marketplace which was powered by the restoration of economic activity across the world following the lifting of lockdowns.
It is to be mentioned that the costs of scrap had more than doubled in 2021 which resulted in a massive increase in investments as some of the smaller investors were compelled to go out of business.
In addition, the other issue for steel companies was the high shipping cost of imported containers, which had persisted for the last couple of years largely as a consequence of the pandemic. After the outbreak of COVID-19 in Pakistan, various major firms initiated real estate projects, and in spite of the increasing-decreasing trends that followed, the market has hailed today’s drop in steel costs.