Pakistan: Imported ferrous scrap prices rise by $2/t w-o-w; bearish outlook amid Muharram

In Pakistan, the imported ferrous scrap market experienced a slowdown due to weak steel demand, influenced by the ongoing Muharram observance.

Industry insiders reported a noticeable decline in inquiries towards the end of the week, with buyers showing interest primarily in yard-specific offers. This trend reflects the cautious approach of market participants amid uncertain demand conditions.

BigMint's assessment of Europe-origin shredded stood at $428/t, up by $2/t w-o-w.

A representative from a major trading house commented, "Pakistan offered better sales realisation, so our focus was primarily on that market last week. We gave a couple of offers from the UK at $430/t, but the market was not active at those levels. UAE offers were at $435/t, with buyers showing interest at $426-428/t CFR."

Around 3,500-4,000 t of shredded scrap from the UK and Europe were booked at $420-430/t CFR Qasim in the last seven days.

As per a market insider, some buyers are also turning to UAE materials, displaying increased interest in PNS and HMS mix grades. Production costs remain a challenge for mid-cap steel producers. Domestic rebar prices are not supportive given the current market conditions. This week, offers are expected to soften further, as bearish market sentiments persist in steel sales.

Domestic market

In the domestic market, average rebar offers were around PKR 256,000-260,000/t as steelmakers reduced their selling prices due to weak demand and a sluggish market, influenced by the two-day break for the Muharram holidays. Billet prices also decreased by PKR 2,000-3,000/t w-o-w, while domestic scrap prices remained range-bound on an ex-works basis, hovering around PKR 158,000-160,000/t.

According to a major steelmaker, many cities are closed for Muharram processions, observing official holidays on 16-17 July. Rebar offers have decreased notably due to sluggish sales, with prices ranging between PKR 158,000-160,000/t in the Karachi (Sindh) and Lahore (Punjab) regions.

Outlook: Imported ferrous scrap prices in Pakistan are expected to remain sluggish this week following the holiday break, as the market is expected to be less active. Additionally, rising costs for steelmaking will likely make steelmakers cautious about purchasing raw materials at higher levels.