The Competition Commission of Pakistan (CCP) has issued show cause notices to two major steel manufacturers, alleging cartelisation within the flat steel market. An inquiry conducted by the commission revealed preliminary evidence suggesting the companies engaged in price-fixing, coordinated price adjustments and the exchange of commercially sensitive information, potentially violating the Competition Act of 2010.
The CCP initiated its investigation in May 2021 following informal complaints of possible collusion among local flat steel producers. Concerns were raised regarding parallel price movements and allegations of artificial market shortages.
Price analysis indicated a pattern of synchronised price changes among key market participants, with adjustments occurring simultaneously and in similar magnitudes. Notably, between July 2020 and December 2023, cold-rolled coil (CRC) prices increased by approximately 111 percent, with near-identical price hikes observed across the two companies.
To further investigate these claims, the CCP conducted search and inspection operations at the companies’ premises on June 12, 2024. Evidence obtained suggests potential coordination between the firms prior to implementing price changes and discounts. The inquiry report also alleges the exchange of commercially sensitive data, including raw material purchase prices, facilitating aligned final product pricing.
Flat steel products, including CRC and galvanised coil (GC), are critical inputs for various sectors, including electronics, automotive, agriculture, and manufacturing. Anti-competitive practices within this market could have significant repercussions for industrial costs and consumer prices. The CCP’s investigation found no evidence of collusive activity by a smaller local competitor. The CCP will now review written and oral arguments presented by the companies before issuing a final order in the case.
