In order to protect domestic steel Industry and to grow country’s steel production, the Federal Board of Revenue (FBR) of Pakistan has doubled regulatory duty up to 35% on imports of alloy and non-alloy long steel products.
In fresh notification issued by FBR, regulatory duty on imports of bar and rod of Non-alloy steel and structural steel has been raised to 30% from 15% percent.
Wire of alloy steel (Special steel) will be accounted under the 35% slab which was 20% previously.
Regulatory duty on other commodities have been kept unchanged.
Pakistan: Regulatory Duty Structure on Various Steel Products
| HS Code | Description | Revised Duty | Previous Duty |
| (Jun’17) | (Nov’15) | ||
| 72043000 | Waste & scrap of tinned Iron & Steel | 5% | 5% |
| 7207 | Semi-finished products of iron & non alloy steel | 15% | 15% |
| 7208 | Flat rolled products of iron or non alloy steel of width 600 mm or more, hot rolled | 12.50% | 12.50% |
| 7209 | Flat rolled products of iron or non alloy steel of width 600 mm or more, cold rolled | 5% | 5% |
| 7210 | Flat rolled products of iron or non alloy steel of width 600 mm or more, plated or coated | 5% | 5% |
| 7213 | Bars & rods, hot rolled in irregular wound coils of iron ore non alloy steel | 30% | 15% |
| 7214 | Other Bars & rods,including twisted after rolling | 30% | 15% |
| 7215 | Other Bars & rods | 30% | 15% |
| 7216 | Angles, shapes & sections of iron ore non alloy steel | 30% | 15% |
| 7217 | Wire of non alloy steel | 30% | 15% |
| 7225 | Flat rolled products of iron or non alloy steel of width 600 mm or more, | 17.50% | 17.50% |
| 7227 | Bars & Rods not rolled in irregularly wounded coils of other alloy steel | 25% | 10% |
| 7228 | Other bars & rods of other alloy steel, angles, sections of other alloy steel | 30% | 15% |
| 7229 | Wire of other alloy steel | 35% | 20% |
| 7303 | Tubes & pipes | 12.50% | 12.50% |
These import duties will benefit the domestic steel producers as they are planning for the expansion with different foreign Steel Makers, mentioned by a producer in Pakistan.
Link to FBR Notification on Pakistan’s Regulatory Duty
Pakistan Steel Outlook
Pakistan steel industry outlook remains healthy as both the long and flat steel producers are expecting the demand growth in double digits at least in the short term (2-3 yrs). Significant public investment in construction projects and CPEC related projects are sustaining demand growth. The GDP growth crosses 5% first time in a decade; this has led massive demand from housing projects and retail consumers (particularly for rebars, pipes etc).
For CRC and galvanized steel products, robust automobile sales and pipe production are driving sales; demand growth is thus likely to sustain medium term. Thus most steel companies are undergoing or will initiate capacity expansion due to come online in FY18-19.
The government and regulatory bodies has imposed anti-dumping duty or regulatory duty on various products including rebars, billets, CRC etc. This will lend more pricing power to the local players than in the past. With the imposition of regulatory duty and Anti-dumping duty, cheap imports from China have almost stopped. This has resulted in tremendous growth in the demand for local producers.
CPEC-China Pakistan Economic corridor stands as the game changer in the infrastructure scenario of Pakistan. Currently, the steel production per capita is 37.5 kg which is well below the average seen in the regional countries and other emerging market economies.
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