Pakistan: Imported scrap buyers cautious, await price correction

Pakistan's imported scrap trade remained slow for yet another week. The market is mostly quiet as buyers are cautious and waiting for a further price correction. SteelMint's assessment for shredded scrap imports in containers into Pakistan stands at $555-560/t CFR, lower by $3-5/t against the end of last week.

Around 1,000 t of UK/EU-origin shredded scrap was booked at $555/t CFR Qasim. Few more offers have been heard for the US-origin material at $550/t CFR levels.

Factors leading to slow market

• Slight correction in recent Turkey deal: Imported scrap prices witnessed a slight correction in the recent deal. A Europe-origin deep-sea cargo containing HMS 1&2 (80:20) was booked at $487/t CFR Turkey, while bonus material was reportedly sold at $507/t CFR and shredded scrap at $510/t CFR. Prices have fallen by $3-4/t against the closing of last week on lower bids. The Turkish Lira continues to weaken against the dollar, currently trading at TRY 11.6.
  
  
• Smog issue in northern Pakistan: As winter approaches in Asian countries, the steel industry gets slighly impacted. North Pakistan has observed a slowdown in market activities due to smog. Also, the Punjab government, as per a recent notification, has announced three days off (Saturdays, Sundays and Mondays) for schools and offices over 27 Nov'21-15 Jan'22, to control the smog. Although mills have not been yet told to curtail production, SteelMint learnt.
  
  
• Month-end electricity billing period: Meanwhile, the last ten days of every month is the electricity billing period and domestic prices have come down to sustain the cash flow during this period.
  
  
• Rebar prices still on higher side: Pakistan's domestic rebar prices are still on the higher side. Steel consumption has slowed down as only major projects are going on as per local sources. End-consumers are waiting for prices to come down. Additionally, the PKR value against the dollar remained firm this week at PKR 175.9. Domestic steel prices for G-60 (10-12mm) rebar are at PKR 191,000-193,000/t exw ($1,085-1,097/t), including taxes.
  
  

Pakistan domestic prices

Source: SteelMint Research

Outlook

Mills have been quiet in the last one week as no major bookings were reported. Hence, steel mills are expected to book scrap actively for the year-end due to the possibility of prices rising during winter on shortage in scrap collection.