Pakistan: Imported scrap buyers turn cautious as offers dip to over five-month low

Pakistan's imported scrap prices have fallen to over five-month low, leading buyers turning cautious as they are expecting a further correction. However, steel mills and buyers are likely to secure inventory sooner or later - keeping in mind the upcoming monsoon season.

Moreover, the sharp depreciation of Pakistani currency against the dollar is another major reason for negative sentiments. The PKR is currently traded at 193.9, registering an all-time low value in the currency exchange market.

Recent deals and offers-

• Fresh offers for imported UK-origin shredded are being offered at $525-530/t CFR levels, down significantly by over $30-40/t w-o-w.
  
  
• In a recent deal, around 2,500 t UK origin shredded have been booked at $525/t CFR levels.
  
  
• A deal for Europe-origin shredded was concluded at around 2,000 t at $520/t CFR Qasim basis.
  
  

Notably, last week-end, around 3,500 t of UK-origin shredded was booked at $530-535/t CFR levels.

Additionally, the absence of Turkish scrap buyers in the imported market have kept other buyers' clueless. Weaker global price sentiments and decline in Turkey imported scrap prices have slowed down the overall momentum.

Domestic steel trade yet to pick up: Domestic steel trade is yet to pick up after the Eid holidays as the labour shortage has delayed construction activities. Tradable prices are at PKR 195,000-200,000/t exw ($1,038-1,065/t). Steel mills are under pressure to cut rebar prices further, while most of the mills have cut their production.

Pakistan domestic market prices

Outlook: As the national currency continues to depreciate, the country's steel mills have turned cautious and are awaiting clarity about the future trend.