Pakistan eyes iron ore imports from India, Iran
Sunday, 7 February 2010
ISLAMABAD, Feb 6 (Commodity Online): 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 tonnes 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 tonnes 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.
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 tonnes 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 tonnes 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.