Pakistan: Imported ferrous scrap index rises $7/t w-o-w; market still slow on weak rebar demand

• Imported deals slow down as rebar sales weaken
  
  
• Payment issues in domestic scrap pressuring trade flow
  
  

Imported ferrous scrap offers to Pakistan increased w-o-w. However, Pakistani mills are not procuring scrap from overseas markets on a frequent basis due to subdued rebar sales and constrained production levels.

BigMint's weekly assessment of European-origin shredded scrap stood at $407/tonne (t) CFR Qasim, a sharp rise of $7/t from $400/t CFR a week ago.

A steel mill representative said,"Domestic scrap availability is not bad but payment is an issue from mills. On the other hand, imported scrap flows remain slow compared to last week."

A major trading house source informed that the international market prices are not at all feasible right now. "In the local market also we are facing huge challenges related to invoice and payment and demand for rebars remains consistently subdued," he said.

According to market insiders, European shredded scrap offers to Pakistani buyers rose sharply to $405-410/t CFR, with most restocking around $405-407/t, following deals concluded at $402-407/t last week.

An importer source commented, "UAE-origin HMS prices remained at $385/t and sheared HMS at 395-400/t. Finished steel sales were minimal due to challenging market conditions and economic uncertainty. However, a more positive outlook is anticipated for the coming week.

In the last seven days, about 4,000-5,000 t UK shredded has been booked at $398-405/t CFR Qasim.

Domestic market trends: Rebar and billet sales continue to remain slow as there are currently no major construction activities. Unofficial workable prices of rebar were heard at PKR 245,000-246,000/y across regions, whereas offers remained at PKR 250,000-252,000/t.

Domestic scrap prices remain slightly firm as compared to last week at PKR 145,000-145,500/t, while billets were priced at PKR 208,000-210,000/t.

According to a source from a steel mill, Grade 60 bars from top brands are currently priced at PKR 250,000/t and above, while normal brands are selling at PKR 246,000-248,000/t. Local scrap prices are around PKR 142,000-144,000/t.

The re-rollers' and melters' associations held meetings to establish a minimum rebar price and regulate production schedules, including potential shutdowns.

Pakistan to sign agreements worth $2 bn with Saudi Arabia

Pakistan is set to sign agreements worth around $2 billion with a visiting Saudi delegation, led by Minister for Investment Khalid Bin Abdulaziz Al-Falih, from 9-11 October. The delegation includes government and private sector representatives, marking stronger economic ties between Pakistan and Saudi Arabia. Prime Minister Shehbaz Sharif highlighted key developments such as support from China, UAE, and Saudi Arabia in securing the IMF program and praised the successful visit of Malaysia's prime minister. Meanwhile, Finance Minister Muhammed Aurangzeb reported daily economic losses of PKR 190 billion due to recent protests and clashes in Islamabad, urging for dialogue to prevent further harm to the economy.

Outlook

Market insiders project a positive price outlook, although improvements in domestic demand may be limited. Furthermore, unconfirmed rumours of a potential rebar price increase could exert pressure if demand does not strengthen. Overall, the global sentiment is bullish so prices might continue to rise in the coming days.