Pakistan: Import scrap offers drop further on limited demand

Pakistan's imported scrap market remains sluggish due to limited demand. Imported scrap prices fell on the back of fewer inquiries owing to tight liquidity and a depreciating currency.

"It doesn't make commercial sense to import right now," a major steel producer source told SteelMint.

SteelMint's assessment for imported shredded scrap in containers stands at $480-485/t CFR, down $10/t w-o-w.

Further, mills have lowered rebar prices despite the extraordinary pressure on manufacturing costs due to skyrocketing utility charges, currency depreciation, and raw material shortage. Steel mills have announced a price reduction ahead of Ramadan.

Currency sinks further: The Pakistani rupee declined further due to uncertainty around the revival of the IMF program and lack of confidence in the government. The currency fell to PKR 283.7 against the dollar, down 1.99 or 0.71% compared to Friday.

Delay in the signing of the IMF staff-level agreement and the absence of reassurance from friendly countries to fund a balance of payment gap has eroded confidence in the government.

The PKR is expected to appreciate once the IMF loan program is revived; higher inflows are expected during Ramadan.

Domestic rebar prices drop ahead of Ramadan

Rebar prices fall further: The country's domestic steel market continued to move at a slow pace. Mills are now trading at low prices due to slow demand ahead of Ramadan. Additionally, production cuts at many mills have already impacted the livelihoods of millions of people.

Deals for deformed grade 60 rebar (10-12 mm) were heard concluded at PKR 280,000-285,000/t exw ($994-1,012/t), including taxes.

Government increases tariff: The ex-Wapda distribution companies (Discos) and K-Electric have demanded permission to charge their consumers about PKR 8.5 billion in additional fuel costs in April at rates of about 86 paise and PKR 1.66 per unit, respectively.

The National Electric Power Regulatory Authority (Nepra) has accepted the respective tariff petitions and has convened public hearings on 30 March to see if the proposed increase in tariff is justified in line with the monthly fuel cost adjustment (FCA) mechanism.

FBR seeks interim tax relief measures: The steel industry has asked the Federal Board of Revenue (FBR) to urgently introduce interim tax relief measures to ensure the availability of steel scrap until the issue of letters of credit (LCs) is resolved.