Abbas Steel Group to put up billet plant in Karachi

Karachi: Karachi-based Abbas Steel Group has signed up with China’s Sinosteel Corporation to supply machinery and equipment to put up a billet mill to provide raw material for group’s rerolling industry of wire rod and rebar mill complex.

It will help try to secure more reliable and cost effective source of semi-finished steel for internal use in their existing three mills, an industry source told MESteel (mesteel.com). The new plant, due to start trial production by end of this year or beginning 2012, will have a total production capacity of 300,000 tons per year when two construction phases are completed.

Abbas Steel Group has three existing mills which have an installed capacity to produce 150,000 tons of rebar per year and 100,000 tons of wire rods, in addition to smaller quantities of steel shafts used mainly in automobile manufacturing industry and wire rod for downstream engineering industry in Pakistan.

Pakistan produces about 3.5 million tons annually of billets and other semi-finished steel out of a five million ton production capacity – or 70% of capacity level. Need for billets and construction steel products is high in Pakistan, but steel industry and development projects face many political and economic challenges including shortages of electricity and gas.

The new melt shop is designed to use scrap, DRI and pig iron to provide flexibility with respect to the availability of raw material.

A shortage in standard quality scrap has led to a ship-breaking industry operating from Balochistan province to expand as an alternative source for scrap for manual mills in Pakistan. Ship plates production is estimated to have touched one million ton per year mark, and this kind of scrap is used to produce lower quality rebar – grade 40 or less – which are used only in small-scale construction projects. Price difference between quality billet and ship plate is around 5,000-7,000 rupees ($57-80) per ton. This type of steel material is in demand among price-conscious consumers in Pakistan.

Abbas Steel Group is also building a wire rod downstream industry to produce wire and wire related products; such as fencing wire net, barbed wire, annealed, galvanized wire, among others, for export markets in Middle East and other countries. It will start production in December with a capacity of 15,000-20,000 tons per year, to be doubled in second phase.

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