The State Bank of Pakistan while taking the stock of performance of steel industry in the first half of the ongoing fiscal year has pointed out that the steel sector was unable to register a growth in H1-FY21, but its contraction narrowed significantly as the year progressed.

Meanwhile, analysis of the sector on a quarterly basis reveals that the output of the sector grew by 6.0 percent in Q2-FY21 against a decline of 6.8 percent in the same period last year. However, this rebound in Q2-FY21 was not enough to offset the decline in the preceding quarter, which resulted in a slight overall contraction during the first half of the fiscal year.

Demand for billets, primarily used in the construction industry, remained strong. This led to a 39.1 percent expansion in the output during H1-FY21 compared to a contraction of 25.9 percent in same period last year. On the other hand, the demand for flat steel products remained subdued owing to a drop in the production of appliances in the country. However, robust demand from the automobile sector compensated for some of the losses from the appliances segment. The increase in demand from the vehicle industry aided in narrowing the contraction in the flat steel production from 30.1 percent in the preceding quarter to 22.4 percent in Q2-FY21