The govt had imposed regulatory duty of 15% earlier this year. PHOTO: AFP
KARACHI: Demanding further protection for the local industry, the Pakistan Steel Melters Association (PSMA) and Large Scale Re-Rollers (LSR) have asked for a levy of 40% regulatory duty (RD) on the imports of steel billets, bars and wire-rods.
This comes after steel importers already enjoy a 15% regulatory duty that was imposed earlier this year.
“Unfortunately, the effect of the 15% duty has been nullified because of increased dumping margins by foreign manufacturers, reduction in customs valuations, and falling prices of steel in the international market,” a press release said on Monday.
The steel oversupply problem is getting more acute and it is due to the government handing out subsidies disguised under policy initiatives to keep their steel industries alive, it added.
“We must take a stand against unfair trade practices and provide an environment of fair competition by imposing 40% duty,” mentioned a member of the PSMA executive committee.
The PSMA and LSR represent majority of the Pakistan’s steel industry with a processing capacity of over 4 million tons per year. The industry’s total investment base is over Rs100 billion, and it contributes over Rs20 billion to the national exchequer every year.
The government imposed 15% duty in January 2015, which had been a resounding success for all the stakeholders involved, it said.
After the imposition of that duty, the government has gained billions in revenue, those reliant on steel imports have also not been priced out of the market. “Over 80,000 tons of steel billets were imported since the levy and the large scale manufacturing (LSM) growth has been positive in the steel sector helping Pakistan in achieving growth targets”
Majority of the re-rolling mills are dependent on steel from ship-breaking industry because they cannot process any other raw materials. If RD of 40% is not levied on billets, ship breaking (Balochistan’s largest industry) will reach a standstill and the downstream re-rolling mills will be deprived of their raw material.
Published in The Express Tribune, May 5th, 2015.
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