Steel sector records uptick in demand

The steel sector of Pakistan is witnessing an uptick in demand on the back of appreciation of the rupee against the US dollar and economic policies undertaken by the government to combat Covid-19.

At a corporate briefing held by Aisha Steel Mills on Monday, the management felt that the local market sentiment was driven by the impact of economic policies, currency appreciation and Covid-19 after-effects. The present market share of locally manufactured cold-rolled coils (CRC) and galvanised iron (GI) stands at 66% and 77% respectively.

Global automobile sales picked up after lockdowns were lifted by countries, thus creating a huge gap between demand and supply due to which prices of hot-rolled coils (HRC) rose globally including in China, said Taurus Securities analyst Ameer Hamza Khan in a report.

Driven by demand, the current price of HRC stands at around $650 per ton and a rise in international price pushes up the local price as well.

Aisha Steel Mills is involved in the production of CRC and hot-dipped galvanised coils with annual production capacity of 450,000 tons and 250,000 tons respectively.

The report revealed that the company recently added tin mill black plate to its product portfolio while it planned to add colour-coating lines to its product mix in the long run.

The company posted loss after tax of Rs616 million in fiscal year 2020 with loss per share of Rs0.89, down 3.4 times compared to the previous year. Earnings were mainly hit by reduced automobile demand and unstable economic conditions in the first quarter, the analyst said.

A rise in Karachi Inter-bank Offered Rate (Kibor), Covid-19 outbreak in the country, a fire incident in the third quarter and lockdown in the fourth quarter played a major role in denting earnings of the company.

Published in The Express Tribune, December 1^st, 2020.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.