The Pakistan Association of Large Steel Producers has urged the Pakistani government and the State Bank of Pakistan to help the steel industry with the problems it is facing as regards the opening of letters of credit (LCs) for raw material and steel imports. Many plants are on the verge of closure as the non-issuance of LCs is paralyzing the production activities of the industry amid the lack of raw material.
According to the association, delay in issuance of LCs can put the construction sector in the country at risk, possibly resulting in a shortage of construction steel bars, an increase in construction steel prices and unemployment, and may discourage any further investment in the steel industry.
The monthly share of LCs in the steel industry amounts to $150 million and its share in the import bill of the country is only 2.5 percent. The association stated that easing the opening of LCs will not have any significant impact on the total import bill of the country.