Import of Steel, Iron Shrinks due to Slowdown of Real Estate Business

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Import of Steel, Iron Shrinks due to Slowdown of Real Estate Business

November 30: The import of raw materials for construction has reduced in the recent years due to the slowdown of real estate business. Data maintained by the Department of Customs show that the import of steel, iron and coal has dropped significantly in the first four months of the current fiscal year.

Import of steel and iron decreased by 33 percent in the review period and that of coal by 37.5 percent.

According to government data, Nepal had imported steel and iron worth Rs 52.14 billion in the first quarter of the last fiscal year. The import of steel and iron in the corresponding period of the current fiscal year was Rs 35.14 billion.

Likewise, the country had imported coal worth Rs 5.93 billion during the review period last year while the import slumped to Rs 3.71 billion this year.

The demand for steel, iron and coal has declined as compared to the past, said Shekhar Golchha, senior vice president of the Federation of Nepalese Chambers of Commerce and Industries (FNCCI).

“The reduction in import of major raw materials indicate that the country’s economy is headed toward a slowdown,” said Golchha.

President of Cement Producers Association Dhruba Thapa said that the decrease in demand of cement has directly impacted the import of coal.

“The low demand of cement has resulted in decrease in production. Therefore, the import of coal which is used as raw material for cement has also decreased,” said Thapa.

Steel producers say that the market has been affected due to the increase in competition among the producers.

“The demand for steel has dropped due to the slump in the real estate business and construction industry,” said Milan Thapa, senior officer at Panchakanya Steel.

Eastern Cosmos Cement’s executive director Prabal Jung Pandey says not just import but the overall economy of the country is shrinking.

“Cement, steel, iron, and brick industries are all running on losses. The stock market is also on downturn since the last two years and the real estate business has also shrunk,” said Pandey.

Other industrialists say that the government’s failure to spend the capital expenditure has resulted in the lacklusture market of raw materials for the construction sector. The government has only spent 6.76 percent of the capital expenditure in the first four months of the current fiscal year, according to the Financial Comptroller General’s Office.

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