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CPEC: The Untapped Potential for the Steel Industry of Pakistan

Have you ever wondered how the China-Pakistan Economic Corridor (CPEC) could change the steel industry? It is evident that CPEC has been a major game changer for the economy of Pakistan and is a key milestone in China’s Belt and Road Initiative. But what are its untapped potentials for the steel industry?

The CPEC has provided access to a large market, simplified trading procedures, and reduced transportation costs. It has improved supply chain efficiency and generated greater opportunities for Pakistan’s Steel Sector. CPEC also provides foreign direct investment, technology transfer, and job creation opportunities in Pakistan.

This article seeks to explore how CPEC can be a game changer for the steel industry, opening the doors to new markets, new customers, and new technologies. We'll look at, how it can help to increase efficiency and productivity across the board, as well as how it can open up new trade channels for Pakistani steel makers.

CPEC & the Steel Industry: An Overview

CPEC offers an unprecedented opportunity for the Pakistan Steel Industry. It could prove to be a game-changer for the country as it unlocks new avenues for economic growth and investment. With CPEC, Pakistan can benefit from modern technology, foreign direct investments in steel-related industries, and improved infrastructure.

Moreover, the second phase of the China-Pakistan Economic Corridor (CPEC) has increased its focus on Special Economic Zones (SEZs). These SEZs are expected to be hubs for steel-related industries and will help stimulate growth in the sector. The SEZ in Faisalabad will become an industrial hub with a focus on light engineering activities such as auto parts manufacturing and electronics appliance assembly (2023, April 13). In addition to these, CPEC also plans to establish nine Special Economic Zones (SEZs) across Pakistan, which will attract more investment and industries that will further increase the demand for steel. According to the Board of Investment (BOI), these SEZs will create about 1.5 million jobs and generate about $10 billion in exports by 2030 (2023, April 13).

One of the main drivers of this growth was CPEC, which created a huge demand for steel for various projects. According to the Ministry of Planning, Development, and Special Initiatives, CPEC has completed 17 projects worth $13 billion as of December 2022, while another 21 projects worth $12 billion are under construction (2023, April 13). These projects include highways, railways, power plants, ports, and Special Economic Zones (SEZs), which require large amounts of steel for their construction and operation.

For instance, the Karachi-Lahore Motorway (KLM), which is a part of CPEC's eastern alignment, is a 1,152 km long six-lane expressway connecting Pakistan's two largest cities. The project cost $6.6 billion and was completed in December 2022 (2023, April 13). The project consumed about 1 million tons of steel during its construction, according to the National Highway Authority (2023, April 13).

Thar Coal Power is a part of CPEC's energy cooperation. The project consists of two coal-fired power plants with a total capacity of 1,320 megawatts (MW), located in Thar Block II in Sindh province. The project cost $2 billion and was inaugurated in March 2023 (2023, April 19). The project used about 400,000 tons of steel for its construction, according to the Sindh Engro Coal Mining Company (2023, April 19).

Another project is the Gwadar Port, which is also a part of CPEC's maritime cooperation. The port is located in the Arabian Sea, Balochistan, and is considered a strategic gateway for trade between China and the Middle East, Africa, and Europe. The port has been upgraded and expanded under CPEC, with new terminals, berths, warehouses, and facilities. The port handled about 1.2 million tons of cargo in 2022, an increase of 58% from 2019 (2021, April 19). The port also consumed about 300,000 tons of steel for its development, according to the Gwadar Port Authority (2021, April 19).

Ultimately, CPEC is likely to provide a great boost to both local and foreign investments in Pakistan’s Steel Industry by increasing profitability, competitiveness, productivity, and access to the International Markets.

Strategies to Leverage the Benefits of CPEC for Steel Producers

CPEC (China-Pakistan Economic Corridor) presents a great opportunity for Pakistan’s Steel Industry to capitalize on. The massive infrastructure development project is estimated to be worth around $46 billion and offers investments in various sectors from energy projects to road and rail networks, to ports (2023, April 13).

Steel producers in Pakistan are set to reap the rewards of CPEC, but in order for them to do so, they must formulate strategic plans that will evolve their businesses to meet the opportunities presented by this game-changing project.

Here are some strategies that can be employed by steel producers to leverage the benefits of CPEC:

Investing in Steel Technology

The modernization of the steel production processes is essential for the industry to grow, remain competitive and take advantage of the opportunities that CPEC offers (2023, April 13). Investing in advanced technology can help improve production efficiency, product quality and reduce costs.

Developing Strategic Partnerships

Partnering with other stakeholders within Pakistan's Building Material Industry can help increase market share and build better relationships with customers and suppliers. A strong network of strategic partners ensures that resources are utilized and knowledge is shared in an optimal way.

Making Use of Local Resources

By utilizing local resources such as tools, machines, raw materials, etc., Pakistani Steel producers can produce their products at a faster rate with fewer imports from China - thus ensuring that Indian Steel producers do not outpace them in this area. This also reduces costs associated with importing supplies from China or other countries.


The CPEC project has the potential to be a game-changer for the steel industry in Pakistan. With access to improved transport and communication infrastructure, the local industry can become more competitive in the global market. CPEC also provides a unique opportunity to tap into the potential of new technologies and the potential for more rigorous innovation, which can result in more efficient production processes and cost savings. Finally, CPEC's initiatives aim to reduce the cost of energy, which can also lead to improved profits. With the right implementation, the CPEC project can ultimately lead to increased economic prosperity and improved living standards for the people of Pakistan.


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State Bank of Pakistan. (n.d.). Industrial statistics.

World Steel Association. (2021, April 19). Steel in the new age.

The Express Tribune. (2020, September 8). The steel industry is likely to generate $32b annually by 2025.

State Bank of Pakistan. (n.d.). Exports by commodity group.

Wikipedia. (2023, April 13). China–Pakistan Economic Corridor.

Statista. (n.d.). Topic: Steel industry.