Local producers oppose steel imports for CPEC

Large steel producers have protested against the use of imported steel, saying that their surplus steel capacity can cater to the demand from mega development projects.

In a letter to Prime Minister Imran Khan on Thursday, the Pakistan Association of Large Steel Producers (PALSP) criticised the use of imported steel for the construction of Gwadar International Airport, development of Export Processing Zones (EPZs), Special Economic Zones (SEZs) and Gwadar Free Economic Zone.

“This is an alarming situation for the local industry,” remarked PALSP General Secretary Syed Wajid Bukhari. Pakistan was focusing on mass industrial development by building SEZs, he said, adding that the construction of new Gwadar International Airport had also started, which was one of the major projects of China-Pakistan Economic Corridor (CPEC).

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 He was of the view that the government should utilise only locally produced steel products, which met international standards, in major projects in order to reap mutual benefits for the industry as well as for the country.

“Other raw material like locally produced cement is already being utilised in these projects,” he said. Bukhari urged the government to curb duty-free import of goods which were being manufactured locally, especially steel, as it was in surplus quantity and met international standards. However, machinery imports should be allowed, as it was not produced locally.

The government should ensure the involvement of domestic steel industry as it had surplus capacity to cater to the entire demand for CPEC related projects, he said.

“If we continue to rely on imports, foreign entrants will capture our entire market and it will immensely increase the burden on balance of payments,” he lamented.

 In comments to The Express Tribune, Cedar Capital Private Limited research analyst Waqas Mustafa said that local producers made high-quality steel, so it should be utilised in CPEC and other big projects rather than importing steel from China or any other country. “This will encourage the local industry.”

 Topline Securities steel sector analyst Mehroz Khan highlighted that the local steel industry was manufacturing graded steel rebar fully compliant with British and American standards. “Allowing the use of imported steel rebar seems unfair, as the local industry is capable of supplying quality steel rebar,” he added.