Pakistan: Import scrap market muted, prices fall

Pakistan's steel market remains inactive during the ongoing holy Ramadan month. Buyers and sellers are not engaging in much activity in the domestic market. The imported scrap market is also following this trend with limited trade heard.

"Some mills are opting for domestic material, considering its immediate availability and cost-effectiveness and prices for imported material continue to decline," said a steel producer source.

"Due to political instability and the ongoing Ramadan month, steel mills and scrap traders are witnessing tight money rotation. Selling pressure may persist for at least the next two weeks," a Middle East-based exporter source told SteelMint.

SteelMint's assessment for imported shredded scrap in containers stands at $465-470/t CFR, down $5/t w-o-w.

Around 1,000 t of shredded material was reportedly booked at $465/t CFR Qasim.

"It's been a quiet market, but some deals have concluded recently," said a major scrap trader.

On the other hand, finished steel demand remained low due to low consumption during Ramadan. According to another source, consumption may increase following the Eid holidays.

However, steel mills are under pressure and are selling finished products at lower prices. Increased production costs, electricity charges and the continued instability of the national currency have kept steelmakers cautious.

Fresh, workable offers for deformed grade 60 rebar (10-12 mm) were heard at PKR 270,000-280,000/t exw ($/t), including taxes. However, official offers from steel mills remain high.

The National Electric Power Regulatory Authority (Nepra) has allowed a further hike in power tariff. Creating hype over a purported sovereign default threat, the government on Friday secured regulatory approval for imposing a surcharge of up to PKR 3.23 per unit on electricity consumers with effect from 1 July for an indefinite period, as per Nepra's latest notification.

This surcharge would increase to PKR 3.23 per unit for all other consumers throughout the next year.

Further, Pakistan's national currency, the rupee, continued to decline to an all-time low. The currency is being traded at PKR 288.06 against the US dollar compared with 283.4 a week ago.