Facing lingering steel shortage, Pakistan is looking for raw material imports from neighboring India and Iran. Pakistan Steel Mills (PSM) has sought permission from the federal ministry of industries for procuring raw material and other items directly from Iran and India to avoid delays in securing prompt supplies.

The shortage of raw material has already compelled the PS to operate at
35-40 per cent capacity against the 80-90 per cent in normal days.

PS wanted direct purchase of iron ore from Iran and India instead of
going through tender process, which takes two months for arrival of raw
material.

Direct purchasing of raw material would take 10 to 12 days to reach the
country while only tender process requires 1.5 to two months. However,
there was no financing issue for procurement of raw material.

Currently there were also problems of arranging ships for bringing raw
material on time, but direct purchase from these two countries would
save time.

PS last month imported 40,000 tons of Indian iron ore costing Rs300
million but it was rejected on poor quality and payment to the supplier
was also blocked.

Pakistan Steel currently holds 21,000 tons of Iranian iron ore. It
operates 90-95 per cent on imported raw material and procures rest from
the local sources. It has frequently been increasing prices of its
products.

Pakistan government last month approved Pak Rs10 billion for the PS,
but market sources said the bailout package would not make any major
difference as the amount may be exhausted in clearing payments and
retiring debt.

Source: Commodity Online

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