CCP issues show cause notices to steel manufacturers
ISLAMABAD: The Competition Commission of Pakistan (CCP) has sent Show Cause Notices to International Steel Limited (ISL) and Aisha Steel Mills Limited (ASML) for alleged involvement in cartel activities within the flat steel market. An investigation by the Commission uncovered preliminary evidence indicating that the two major producers participated in price-fixing, coordinated price adjustments, and shared confidential commercial information, which is a violation of Section 4 of the Competition Act, 2010.
The CCP launched the inquiry in May 2021 following informal complaints about potential cartelization by local flat steel manufacturers. These complaints pointed to parallel price movements and alleged an artificial shortage of steel products in the market.Steel Industry Demands Fair Approach to Turnover Tax
Price analysis revealed a consistent pattern of price alignment among key players, with price changes occurring simultaneously and in identical amounts. From July 2020 to December 2023, the prices for cold-rolled coil (CRC) rose by Rs. 146,000 per metric ton for ISL and Rs. 145,900 per metric ton for ASML, representing an average increase of 111 percent.
To further probe these claims, the CCP carried out a Search & Inspection at the facilities of ISL and ASML on June 12, 2024. The seized evidence suggests that both companies allegedly coordinated prior to making any price adjustments or offering discounts. According to the inquiry report, ISL and ASML also exchanged sensitive information regarding raw material purchase prices, which allowed them to synchronize their final product pricing.
Flat steel products, including Cold Rolled Coil (CRC) and Galvanized Coil (GC), are widely used in industries such as electronics, automotive, agriculture, and manufacturing. Any anti-competitive behavior in this sector can have significant repercussions, affecting industrial costs and consumer prices. However, the CCP’s investigation found no evidence of collusion by the smaller competitor, Hadeed Pakistan Limited (HPL).
In light of these findings, the CCP has issued Show Cause Notices to ISL and ASML. The Commission will issue a final decision in the case after considering the written and oral arguments presented by the involved parties.
