Pakistan to impose import duty on HR products

Pakistan is likely to impose a 15% regulatory duty on imported hot rolled products (HR) and pipes, according to reports. This proposal came from the country's Ministry of Industry and Manufacturing and is currently approved by the Federal Board of Revenue (FBR). In addition, a flat tax of 5,600 PKR per ton will be levied on the import of billets and scrap metal.

The federal government recently imposed regulatory duties on a wide range of products, with the exception of hot rolled products. A 15 percent duty was imposed on imports of rebar and wire rod. Also, a 5 percent duty was imposed on the import of cold-rolled coils and galvanized sheets. The only exception at the moment is hot rolled products, which negatively impacts sales of the Pakistan Iron and Steel Works (PSM), the only HR producer in the country.

The introduction of duties is intended to protect domestic industry from cheap imports, primarily from China. The duties on these products should help revive the country's domestic steel industry and generate additional income. This decision was made in relation to the import of Chinese products in a number of other countries, including Turkey, the EU, the USA, the Philippines, Vietnam and Malaysia. Several other countries are also creating non-tariff barriers to block growing imports from China.

PSM aims to produce at least 500,000 tonnes of HR hot rolled products, which is 72 percent of its estimated annual demand of 700,000 tonnes. In addition, the company plans to increase its production capacity from 50 percent to 77 percent from April 2015.