3 Pakistani steel stocks ready to tap US market

August 27, 2025 (MLN): Aisha Steel Mills Limited (ASL), International Industries Limited (INIL), and International Steels Limited (ISL) stand at the threshold of a transformative opportunity as recent trade policy developments have positioned Pakistani steel giants for dramatic export growth to the United States.

These three industry leaders are uniquely positioned to capitalize on recent developments that have fundamentally altered the competitive landscape for steel exports to America.

The convergence of US anti-dumping duties targeting $2.9 billion worth of steel imports from ten countries, combined with Pakistan's strategic tariff restructuring, has created an unprecedented window for ASL, INIL, and ISL to establish significant market presence in the world's largest steel import market.

As major competitors now facing punitive duties and Pakistan implementing cost-reducing tariff reforms, these companies are poised to capture substantial market share in the lucrative US steel sector, particularly in corrosion-resistant products used in automotive, appliance, and construction industries.

The US Department of Commerce's affirmative determination of anti-dumping and countervailing duties against ten countries represents a seismic shift in the global steel trade landscape.

The affected nations, Australia, Brazil, Canada, Mexico, the Netherlands, South Africa, Taiwan, Turkey, the United Arab Emirates, and Vietnam, collectively exported $2.9 billion worth of corrosion-resistant steel products to the United States.

This development is particularly significant for ASL, INIL, and ISL for several reasons:

Reduced competition from major players

Vietnam, which had emerged as a significant competitor to Pakistani steel in various markets, now faces anti-dumping duties that will substantially increase the cost of its exports to the US.

This levels the playing field for ASL, INIL, and ISL, who were previously undercut by subsidised Vietnamese steel products.

Market vacuum in critical segments

Corrosion-resistant steel products, used extensively in automobile manufacturing, appliances, and construction, represent a high-value segment where ASL, INIL, and ISL have demonstrated strong production capabilities.

ASL's expertise in galvanized products, INIL's diversified steel portfolio, and ISL's specialized steel solutions position all three companies to immediately capitalize on this market vacuum created by the removal of heavily subsidized competition.

Pakistan's strategic tariff restructuring

The National Tariff Commission's comprehensive report, submitted to the Economic Coordination Committee on August 13, 2025, outlined a transformative approach to Pakistan's steel industry policy that directly addresses the sector's export competitiveness challenges.

Zero-duty raw material access

The proposal to reduce duties on basic raw materials (iron ore, scrap, direct reduced iron, and HMS) to zero represents a fundamental shift toward export-oriented industrialization.

This policy change will:

Reduce Production Costs: Lower input costs directly translate to improved profit margins and pricing flexibility in export markets

Ensure Supply Security: Uninterrupted access to raw materials eliminates supply chain disruptions that have historically hampered Pakistani steel production

Enhance Price Competitiveness: With raw material costs reduced, Pakistani steel can compete more effectively on price against international suppliers

Rationalized protection structure

The gradual reduction of regulatory duties from current levels to 10% over three years provides a balanced transition that maintains industry viability while pushing for efficiency improvements.

This approach:

Encourages Efficiency: Reduced protection forces companies to improve operational efficiency

Maintains Competitiveness: Gradual reduction prevents sudden market shocks

Supports Export Focus: Lower domestic protection incentivizes companies to seek international markets

Export potential and capacity utilization

Pakistan's steel industry demonstrates significant untapped potential, particularly in flat steel products, where export performance has shown encouraging trends.

Despite installed capacity of 8 million metric tons for long steel products and substantial flat steel capacity, the industry has operated below optimal levels.

The policy changes create conditions for better capacity utilization by reducing input costs through zero-duty raw materials and improving demand through lower domestic prices. 

Encouraging export-oriented production

The flat steel segment's export of $363 million worth of cold-rolled coils, galvanized sheets, and coated products to markets including the US and Canada demonstrates Pakistani manufacturers' ability to meet international quality standards and compete in developed markets.

With the proposed tariff restructuring, ASL, INIL, and ISL will benefit from:

Lower Raw Material Costs: Zero duties on inputs provide immediate cost advantages

Reduced Regulatory Burden: Simplified duty structures reduce compliance costs Improved Working Capital:

Immediate actions

ASL, INIL, and ISL should coordinate efforts to ensure compliance with US quality standards and certifications.

The companies should develop distribution networks while establishing relationships with US distributors and end-users.

Furthermore, they should optimize their product mix to focus on high-demand segments like automotive and construction steel. 

Medium-term Positioning

Over the next 3-5 years, ASL, INIL, and ISL should focus on strategic capacity expansion by leveraging the improved economic conditions created by reduced input costs and increased export demand.

The companies can reinvest the additional revenues generated from US market penetration into expanding their production facilities, allowing them to capture larger market shares while maintaining competitive pricing.

Simultaneously, these companies must prioritize quality enhancement initiatives by investing in advanced technology upgrades and modernization programs that will enable them to meet the stringent premium market requirements of US automotive, appliance, and construction sectors.

This technological advancement will be crucial for maintaining long-term competitiveness against other emerging suppliers who may eventually enter the market.

Furthermore, supply chain integration should become a strategic priority, with companies developing robust and integrated supply chains that ensure consistent delivery schedules and quality standards for US customers.

This involves establishing strategic partnerships with raw material suppliers, investing in logistics infrastructure, and potentially developing regional distribution centers that can serve the North American market more effectively.

Long-term Strategic Goals

In the long term, ASL, INIL, and ISL have the opportunity to establish Pakistan as a reliable alternative supplier to traditional steel sources, building a reputation for consistency, quality, and competitive pricing that will sustain market presence even as global trade dynamics continue to evolve.

The companies should focus on moving up the value chain by developing capabilities in higher-margin specialty steel products, including advanced high-strength steels, automotive-grade materials, and specialized coatings that command premium prices in the US market.

The ultimate strategic vision should position Pakistan as a comprehensive steel export hub for the broader South Asian region, with these three companies leading the transformation of the country's industrial base toward export-oriented manufacturing.

This regional hub development would involve creating clusters of supporting industries, developing specialized export infrastructure, and establishing Pakistan as a preferred sourcing destination for North American companies seeking to diversify their supply chains away from traditional suppliers who may face ongoing trade tensions or geopolitical uncertainties.

Export Growth Potential

The three companies collectively could capture 8-15% of the affected $2.9 billion market within 2-3 years.

This would translate to potential additional export revenues of $232-435 million annually across the three companies

Increased steel exports will stimulate upstream industries including mining, transportation, and logistics.

Policy Risk Considerations

ASL, INIL, and ISL must maintain vigilant monitoring of US trade policy developments that could potentially affect their market access, as American trade policies can shift with changes in administration or evolving geopolitical circumstances.

The companies should establish dedicated trade policy monitoring systems and maintain close relationships with industry associations and government trade representatives to receive early warnings of potential policy changes that could impact steel imports.

Equally important is ensuring continued domestic policy consistency by working closely with Pakistani government officials to maintain support for export-oriented policies, including the proposed tariff restructuring and zero-duty raw material access that forms the foundation of their competitive advantage.

The companies must also develop comprehensive currency risk management strategies to protect against exchange rate fluctuations between the Pakistani rupee and US dollar, which could significantly impact profit margins on export contracts.

This involves implementing sophisticated hedging strategies, including forward contracts, currency swaps, and options, while also considering natural hedging through strategic sourcing of raw materials in US dollars.

Additionally, the companies should maintain flexibility in their contract structures to accommodate currency volatility and consider establishing US dollar revenue reserves to buffer against sudden exchange rate movements that could threaten the viability of their US market expansion plans.

The next 12-18 months will be critical in determining whether ASL, INIL, and ISL can effectively translate this policy-driven competitive advantage into tangible market success.

With proper execution, these companies have the potential to generate hundreds of millions in additional export revenues and establish Pakistan as a reliable long-term steel supplier to the United States.

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