KARACHI: The price of steel bars has hit a new peak further pushing up cost of construction.
A steel dealer said the price of high quality rebar now hovers between Rs107,000-110,000 per tonne against Rs97,000 per tonne in April.
Faizul Sultan at BMA Capital said Amreli Steel on Tuesday raised prices of rebar by Rs4,000 to Rs107,000 per tonne. This is the fourth straight increase since February, taking cumulative price increase to 20 per cent.
He attributed price rise to latest rupee devaluation. The local currency lost its value by 21pc from December 2017 till to date against the dollar.
Following the price increase, the discount of imported versus locally produced rebar has narrowed to 20pc, which is in line with the trend seen in recent months. The movement in international scrap price has been nominal since the last price increase in June, he added.
Senior Vice-Chairman Association of Builders and Developers of Pakistan (ABAD) Fayaz Ilyas told Dawn that the cost of construction has risen by 10-12pc in the last six months due to price rise in steel bars alone which was Rs80,000-84,000 per tonne.
Similarly, soaring cement price further pushed up construction cost by 10pc in the last six months, while frequent devaluation of the rupee has turned tiles and sanitary wares costlier by 5-6pc, he said.
He recalled ABAD has time and again requested previous governments to do away with regulatory duties (RDs) and additional RDs which were imposed to provide protection to the local players but local manufacturers are taking undue advantage by increasing rates of various construction materials.
He said the government should formulate a policy under which can allow the builders to import construction materials instead of relying on the powerful cartel of cement and steel makers.
Chairman ABAD Arif Jeewa said reports are coming up for further increasing RD which would further aggravate condition of construction sector and ultimately general public will suffer the impact of any raise in RD.
Pakistan is facing shortfall of 12 million housing units and if the government will increase RD, the construction activities would come to a halt following persistent rise in construction cost, he said.
(This news/article originally appeared in DAWN on July 19th, 2018)