Pakistan: Imported ferrous scrap prices edge down by $2/t w-o-w on subdued buying interest

Imported ferrous scrap offers to Pakistan dropped slightly w-o-w due to sluggish demand from the downstream steel market. Buyers were hesitant to book new scrap shipments due to weak finished steel sales, which prompted some steel mills to reduce production to 50-60% of their capacity.

BigMint's weekly assessment of European-origin shredded scrap stood at $390/tonne (t) CFR Qasim, down from $392/t CFR a week ago.

UAE-origin shredded scrap offers were reported at $395/t CFR Qasim, while HMS (80:20) was offered at $365-370/t CFR, though there were no firm bids.

Market overview

Pakistan's domestic market remains weak, with rebar and billet prices under significant pressure due to poor steel demand. Grade 60 rebars were being offered at PKR 240,000-242,000/t, with top-tier producers pricing theirs at PKR 253,000-255,000/t.

Sellers are keen to liquidate their stock to prevent further losses and maintain cash flow. Local scrap prices were at PKR 140,000-150,000/t, while billets were priced at PKR 205,000-210,000/t.

Market participants report that steel mills are offering discounts in an effort to boost rebar sales in the domestic market. A mill official commented, "We have received shredded UK scrap offers at $390/t CFR, but the bars market is extremely depressed. Some sellers are offering grade 60 rebars at PKR 240,000-242,000/t, while top players with strong brand names are selling at PKR 253,000-255,000/t. Overall demand is very low, and market sentiment remains negative."

A trader stated, "Inquiries are limited due to a slowdown in construction activities and higher interest rates, which are making it difficult for buyers to commit to large volumes."

Another steel mill representative noted, "The market is holding steady at around $390-395/t CFR, but extremely weak demand is discouraging importers from making new inquiries. Some mills are intentionally keeping production levels low."

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Outlook

The near-term outlook for Pakistan's ferrous scrap and steel markets remains challenging. Weak demand for finished steel, sluggish construction activity, and high interest rates continue to dampen buyer confidence, leading to low scrap inquiries and production cuts. Steel mills are offering discounts to boost rebar sales, but market sentiment remains negative. With significant losses reported by major players such as Amreli Steel and pressure on domestic prices, recovery appears unlikely in the short term. While new projects such as the steel mill in Karachi may offer long-term potential, near-term demand is expected to stay subdued due to economic challenges.