Date: 11 July 2019 , 09:10
News ID: 5116
NEWS SERVICE: ECONOMY and TRADE

Pakistan: What is the Impact of Budget on Steel Scrap Prices ?

Pakistan’s government declared its FY20 budget on 11th Jun’19 which has been implemented since the beginning of the new financial year on July 1st. The government has imposed a new tax regime in order to do away with the existing complex regime and realise the actual revenue potential of steel sector and support the industry.
Pakistan: What is the Impact of Budget on Steel Scrap Prices ?

Steel scrap prices in Pakistan has observed a jump with Budget's impact is slowly being witnessed in the market.

Being a scrap dependent country for its steelmaking, SteelMint has studied the changes industry went through especially from Remeltable & Rerollable scrap perspective. The study demonstrates below tentative keynotes –

New tariffs on Remeltable scrap increase by net around PKR 9,000 -

-- Sales tax of Rs. 5600 which was adjustable against Electricity bills has been completely removed. Federal Excise duty has been applied instead.

-- Electricity cost has been reduced by PKR 13/unit. Which will amount to a reduction of 9100 PKR/mt (USD 58) in input cost. The government has fixed the electricity use as 700 units = 1 mt for melting.

Has steel billet-making price been altered? Although the duties have been increased, the total cost of making Steel Billet has not changed by much.

-- Electricity cost has been reduced by PKR 13/unit. Which will amount to a reduction of 1430 PKR/mt *(110 units of electricity consumption = 1 mt. This has been fixed by the government).

source: SteelMint
Pakistan budget Scrap industry electricity
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