Pakistan: Imported ferrous scrap offers rise $7/t w-o-w despite limited buying activities

Imported ferrous scrap prices in Pakistan experienced a slight uptick of $7/t compared to the previous week. This increase is attributed to sellers maintaining a firm stance. However, purchasing activities have remained moderate due to the ongoing observance of Ramadan.

Current offers for shredded scrap from Europe were heard at around $410-415/t CFR Qasim.

Market participants said, "Sellers are attempting to raise prices, but sluggish domestic rebar sales mean that only mills urgently requiring raw materials are procuring imported scrap, while others are inactive. Additionally, with Ramadan ongoing, buyers tend to reduce their purchasing."

An official of a steel mill commented, "The market in Pakistan is currently experiencing a slowdown due to Ramadan. Sentiments remain stable during this period, with sales trending towards lower levels."

Notably, around 3,000-4,000 t of shredded scraps were heard to have been booked since last Tuesday from the US and Europe in the range of $402-412/t CFR Qasim.

Domestic market updates

In the domestic market, the demand for rebars has faced pressure following the aftermath of elections in February and the onset of Ramadan in early March. Rebar prices were reported around PKR 245,000-255,000/t, with scraps at PKR 155,000-160,000/t and billets at PKR 218,000-225,000/t.

An official representing a steel mill acknowledged, "Currently, the market is relatively stable due to reduced buying activity during Ramadan. However, there are expectations of a PKR 5/unit increase in electricity tariffs, which would directly impact electricity costs. Consequently, mills are contemplating raising rebar prices in the upcoming week."

According to a local news website, "In line with the persistent trend of electricity price fluctuations affecting demand, the Central Power Purchasing Agency (CPPA) has proposed an increase of about Rs 5 per unit in fuel cost adjustment (FCA) for upcoming bills. This adjustment, reflecting electricity consumption in February, aims to generate an additional Rs 35 billion for the ex-Wapda Distribution Companies (Discos)."

Outlook

Following global cues and the ongoing subdued activity due to Ramadan, it is anticipated that activities will continue to be slow. However, an improvement is expected post-Eid. Regarding pricing, offers are likely to remain range-bound with minor adjustments.