Pakistan: Domestic scrap prices spurt on renewed buying; silence on imports

Pakistan's domestic scrap prices have increased significantly this week. The tight scrap availability and improved demand for local scrap from furnaces have supported the price hike. SteelMint assessment for local scrap, which is equivalent to shredded, stands at PKR 129,000-130,000/t exy levels, increasing sharply by PKR 4,500/t ($25) w-o-w.

"Buyers are aggressively booking local scrap. A few small-sized mills, which had been closed completely for a long time, are likely to reopen and resume operation from the 1 Dec'21", said a major scrap trader based in Pakistan. Hence, requirement from the consumers is high at present.

On the other hand, bigger mills have remained absent from booking imported scrap since the last couple of weeks which has kept trading on the lower side.

Imported scrap trade remains slow: Imported scrap trade has slowed down this week. However, offers for the same remained stable at $555-560/t CFR Qasim levels.

• In a recent deal, around 5,000 t of UK/EU-origin shredded have been sold by a trader at $555/t CFR Qasim basis.
  
  
• Another major mill has booked around 1,000 t of shredded from the UAE at $566/t CFR Qasim basis. Additionally, the buyer has booked a decent quantity of shredded at $557/t CFR from USA.
  
  
• UAE-origin HMS1 offers are assessed at $520/t, CFR Port Qasim.
  
  

PKR hits new low: The Pakistani rupee (PKR) has maintained the downtrend for the past six months. It plunged to an all-time low to PKR 176.6 on Monday against the dollar in the currency exchange market. Currently, the PKR is being traded at 175.13 to the dollar.

Domestic rebar prices firm: Pakistan's domestic rebar prices are mostly stable on a weekly basis. Domestic rebar consumption slowed down especially in the Punjab region due to the winter smog which has kept rebar prices unchanged.

Domestic steel offers for G-60 (10-12mm) rebar are at PKR 191,000-193,000/t exw, including taxes.

Pakistan domestic price

Source: SteelMint Research

Outlook

Market insiders feel there is less chance of a further correction in imported scrap prices. The key buyers are also likely to resume inquiries this week which may in turn support the country's imported scrap market.