Pakistani long steel producer Amreli Steels announced plans to temporarily suspend operations at its Karachi plant due to significant economic challenges, according to a stock exchange filing.
The company’s board of directors cited various economic and political factors contributing to the difficulties faced by the steel sector. These include declining demand for steel rebars, rising utility costs, particularly electricity, high interest rates, an imbalanced tariff structure, heavy taxation, smuggling, and increased undocumented activities. These issues have created unfair competition and severely disrupted market equilibrium, the company stated.
Amreli Steels will temporarily shut down its rolling mill in the S.I.T.E. area of Karachi, which accounts for 30pct of the company’s total production capacity. The company plans to review the situation in six months and may reopen the facility if conditions improve.
During the closure, Amreli Steels will continue operations at its Dhabeji facility, which represents 70pct of its production capacity, to meet ongoing and future demand. Amreli Steels has an annual production capacity of 600,000 tons of billets and 605,000 tons of rebar.
