An unprecedented increase in energy and petroleum products prices and high market demand have jacked up the cost of almost all construction material across Punjab, especially the provincial capital.
Speaking to The Express Tribune on Wednesday, a former chairman of the Pakistan Re-rolling Mills Association (PRMA), Asmat Pervaiz, disclosed that prices of steel products, including bars, angles, girders, pipes and sheets, are at all time high owing to high production cost, inflated demand and limited manufacturing capacity.
Branded or graded steel products’ prices are hovering between Rs185,000 and Rs187,000 per tonne, while local steel is being sold for Rs160,000 to Rs165,000 per tonne in different areas of the province.
Increase in energy tariffs has raised the production cost by almost 40 per cent, he estimated.
The business leader said consecutive increases in prices of petroleum products have jacked up the freight cost.
“Right now, a bullish trend is being witnesses in steel markets across the country. Buyers have to wait for a week or so after making payment to get their orders delivered owing to a very high market demand,” he revealed.
Pervaiz said that around 20% small steel manufacturing units could not resume operations after the coronavirus lockdowns, which has further reduced the industry’s capacity.
A construction package announced by Prime Minister Imran Khan has created a huge demand of all construction materials, like steel, aluminum, glass and electrical fixtures.
“The demand is so high that builders do not even bother to ask the price. They just want smooth supply of required material to avoid loss of working days,” he pointed out.
Responding to a question, he predicted that the prices of steel products and other building material would rise further with stability in Afghanistan, which will be later followed by expansion of the local industry. Chinese investors are also trying to tap the opportunity by signing joint ventures with different local manufacturers.
A glass dealer, Muhammad Shahid, highlighted that aluminum and float glass rates have been increased by about 25% during past couple of months owing to high demand and increased manufacturing cost.
He said the real estate and construction sector is booming. Big commercial and residential projects are being built everywhere in the country. Rates of construction materials are changing on a daily basis.
A plywood dealer, Hafiz Bilal, revealed that prices of wooden boards have been increased by Rs300 to Rs600 per sheet during recent months. Every other week, the rates are being revised upward by the industry. Imported sheets are also showing exorbitant increases owing to high customs duty, taxes and freight costs.
A fancy lights trader, Muhammad Asif Bashir, said prices of almost all fancy lights and chandeliers have been increased by around 40%.
Every week, importers warn traders that rates of new shipments would further jack up prices owing to high import cost and dollar rate, he added.
He pointed out that the freight charges of a 40-foot container from China to Pakistan have been increased from $2,000 to $9,000 after the Covid-19 pandemic. Amid the inflationary trends, desire of low-cost housing among common citizens has become a distant dream.
A citizen, Muhammad Farhan, said low-cost housing is just a fancy political slogan, otherwise it is not practical in any urban area. Land cost in urban centres has already gone beyond the reach of common citizens.
In the post-Covid era, it has become really hard for people make ends meet amid such a high level of inflation.
Published in The Express Tribune, November 4th, 2021.
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