Pakistan: Imported ferrous scrap trade remains sluggish amid gloomy rebar sales

The domestic steel market in Pakistan remains sluggish and uncertain due to the prevailing conditions. According to some participants, "the slow pace persists", and the situation is likely to be further exacerbated by the forthcoming monsoon season and budget concerns.

Imported ferrous scrap trade activities continue to be sluggish, with only mild signs of improvement.

Notably, the offers for UK-origin shredded scrap stood at $438-440/t CFR. However, only nominal deals were reported this week. Prices have remained range-bound d-o-d, experiencing a slight decrease of $3-5/t w-o-w.

While the availability of local scrap in Pakistan is adequate, the real issue lies in the slow market for steel rebars. Finished sales are experiencing a significant downturn, and many large-scale plants are either closed or operating at capacities that have been typically reduced to around 30-35% only. Consequently, the overall economic activity in the steel sector is considerably subdued.

The prevailing uncertain market situation, slow imported scrap trade, and a sluggish market for steel bars are collectively contributing to the subdued state of the steel market in Pakistan.

Domestic market sluggish

The current state of the steel market in Pakistan is exerting significant pressure on steel producers, necessitating careful financial planning and strategic measures to ensure sustainable operations in the face of ongoing challenges.

However, offers for deformed grade 60 rebar (10-12 mm) have gone up further by PKR 5,000/t to PKR 260,000-265,000/t exw ($913-931/t), including taxes.

Current offers for local scrap are ranging at around PKR 184,000-190,0000/t ($653-674/t) exy - equivalent to shredded, range-bound w-o-w.

PKR fluctuates

The Pakistani rupee (PKR) continued its fluctuation against the US dollar and slightly appreciated in the currency exchange market. According to the State Bank of Pakistan, the dollar settled at PKR 283.4 compared with PKR 286.9 a week ago.