Pakistan is the World's Fastest Growing Steel Producer

[Riaz Haq]

Steel production in Pakistan jumped 39.3% to 5 million tons last year, according to World Steel Association. Earlier, Pakistan steel industry ramped up its output from 2.9 million tons in 2015 to 3.6 million tons in 2016.

While Pakistan's steel production growth is the world's fastest,  its relatively small steel production volume of 5 million tons ranks it 28th in the world. Other nations seeing strong growth in steel production are Iran (up 21.4%), Vietnam ( 31.9%) and Egypt (35%).   Iran ranks 13th with 21.7 million tons; Vietnam ranks 19th with 10.3 million tons; Egypt ranks 23rd with 6.8 million tons produced in 2017.

Some of the key names ramping up production capacity in Pakistan are Aisha Steel Mill (ASM),  Amreli Steels and Agha Steel Industries.

ASM, an Arif Habib Group company, is planning to expand capacity to a total of 700,000 tons a year from its current capacity of 220,000 tons.

Amreli Steels Limited, country’s leading steelmaker has announced plans to increase its annual production capacity of reinforcement bars to 750,000 tons a year within the next two years.

World Steel Production. Source: WorldSteel Association

The biggest drivers of soaring steel demand in Pakistan are rapidly growing large scale manufacturing and construction sectors.

Car sales shot up  23% while motorcycle sales soared by 20% in January 2018, according to industry data.

The cement sales, a good proxy for construction sector, rose 14.3% in the first 7 months of fiscal 2017-18.

World Steel Trade. Source: WorldSteel Association

Pakistan is the third fastest growing economy among the top 25 economies in terms of purchasing power parity.  Pakistan's economic growth is continuing to accelerate amid rising rising investments led by China-Pakistan Economic Corridor related infrastructure and energy related projects.  The IMF sees Pakistan economy growing at 5.6% while the World Bank forecasts it to grow by 5.5% in current fiscal year 2017-18 ending in June 2018, a full percentage point faster than the 4.5% average GDP growth for Emerging and Developing Economies (EMDEs) that include Argentina, Brazil, China, India, Nigeria and Russia among others. However, Pakistan economic growth continues to lag growth forecast for regional economies of India and Bangladesh. The report also calls attention to the expanding current account gap as a matter of concern that must be taken seriously by the government to avoid yet another return to the International Monetary Fund (IMF).

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[Riaz Haq]

Pakistan steel production rose from 3.3 million tons in 2019 (rank 40) to 3.8 million tons in 2020 (36).

In addition, Pakistan imported 2.3 million tons of steel in 2020.

Total Consumption in 2020: 6.1 million tons.

https://worldsteel.org/wp-content/uploads/2021-World-Steel-in-Figur...

[Riaz Haq]

Pakistan Economic Survey 2021-22 (Manufacturing Sector)

https://www.finance.gov.pk/survey/chapter_22/PES03-MANUFACTURING.pdf

Iron & Steel production jumped by 16.5 percent during the period under review against the contraction of 8.6 percent in the same period last year. Billets/Ingots, mainly used in construction industry, grew by 32.8 and H/C.R.Sheets/Strips/Coils/plates increased by 7.9 percent. Both reflect the growth momentum in automobile and construction-allied sectors. Non-metallic Mineral Products inched up 1.1 percent as compared to 18.5 percent increase last year.

[Riaz Haq]

Agha Steel Industries launches eco-friendly plant

https://tribune.com.pk/story/2435807/agha-steel-industries-launches...

Addressing the launch ceremony of 'Original Green', aimed at producing green steel through eco-friendly electric arc furnace technology, at a plant located in Port Qasim, CEO Hussain Iqbal Agha said that in five years, Pakistan would need 11 million tonnes of steel.

The investment phase for the expansion of the industry will begin in 2025-26, said Agha, adding that this would reduce consumption by 15% and raw materials needed by 10%.

The blast furnace purchased by the company will be operational in 12 to 18 months and will have the capacity to melt 4,500,000 tonnes of steel a year, according to Agha.


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Agha Steel to commission blast furnace at Karachi plant
Pakistan - 2023 September 14
Agha Steel Industries Limited, based in Port Qasim, Karachi, Pakistan, is in the process of commissioning a new blast furnace at its facility.

This strategic move involves the acquisition of a 50-cubic meter (m3) blast furnace as part of the company's backward integration strategy, as announced in a stock exchange filing.

This new blast furnace is designed with a production capacity of 50,000 tons per year and is slated for commissioning within the next 18 months.

In a move toward securing a consistent supply of raw materials, Agha Steel Industries Limited has forged partnerships with iron ore mine owners in the Khyber Pakhtunkhwa (KPK) region. This arrangement ensures an exclusive source of essential materials for the new blast furnace. Furthermore, the company has expressed its intention to explore the potential for exporting iron ore from these mines to the international market, depending on the commercial viability.

This strategic addition of a blast furnace aligns with Agha Steel's vision to reduce its reliance on imports and tap into local resources. Recent challenges have emerged in Pakistan due to dwindling foreign exchange reserves, prompting authorities to impose restrictions on imports. This situation has had a particularly adverse impact on the steel sector, as majority of the scrap volume is imported from other countries.

Agha Steel stands as a major steel producer in Pakistan, boasting an annual rebar production capacity of 240,000 tons. The company is actively expanding its production capabilities and has secured an additional 17 acres of land adjacent to its existing facility for the establishment of a new re-rolling mill. Upon the completion of this expansion, Agha Steel will substantially increase its annual production capacity to 450,000 tons of billet and 650,000 tons of rebar.



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