Pakistan: Imported ferrous scrap prices rise by up to $4/t w-o-w; sluggish activities amid Ramadan, Eid

Imported ferrous scrap prices in Pakistan continued to rise by up to $3-4/t compared to the previous week. This rise in offers is not getting any positive response from Pakistani mills or buyers, followed by dull activities in the domestic steel and scrap markets due to Ramadan and the coming Eid holiday.

Limited offers from the UAE are attributed to the approaching Eid holiday, while US suppliers were closely monitoring Turkiye, maintaining a firm offer range due to their robust steel market.

Around 2,000-3,000 t of shredded scrap from the UK and Europe were being booked at $424-426/t CFR Qasim throughout this week.

BigMint's assessment for Europe-origin shredded stood at $426/t, up by 4/t w-o-w.

A major steel mill representative noted, "The UK/EU shredded we heard lastly at 425-430/t CFR, the UAE stopped offering as their market will be a long week holiday. We are going out of the market from 10-14 April 2024, however, official holidays are from 10 to 12 April 2024 followed by the weekend so business is likely to open next Monday."

Domestic market:

In the domestic scrap and steel market, the indicative price remained range-bound as rebar prices were reported at around PKR 255,000-256,500/t ($918-923/t), with scrap at PKR 156,000-158,000/t($561-569/t) and billet at PKR 220,000-222,000/t($792-799/t).

According to another representative from a mill, "the local steel market is experiencing a significant slowdown. Some mini-mills have halted operations altogether, while others are operating at minimal production levels due to weak demand in the infrastructure sector. Additionally, end-users in the steel industry are showing limited interest."

Multiple sources have confirmed that activity in the rebar and billet markets remained sluggish last week. This was attributed to a liquidity issue, with customers prioritising utility bill payments over steel purchases.

Importers are actively securing dollars for future needs in line with the State Bank's policy. Import restrictions have had a notable impact on economic growth, with low imports and high inflation contributing to negative growth last year.

Remittances surged to nearly $3 billion in March, the highest level since April 2022, driven mainly by Ramadan, according to the central bank. The uptick in remittances aids in reducing the current account deficit, stabilising the exchange rate, and boosting economic confidence.

Outlook: As per market observers, Turkiye is currently at the centre of attention, especially with the upcoming Eid holiday this week, and a clearer outlook is expected to emerge at the start of the third week of April.