Pakistan: Imported scrap market quiet; prices hit three-month high

Pakistan's imported scrap market remained largely quiet due to limited overseas offers amid winter holidays as the scrap accumulation rate is usually slow. A market participant informed that prices may trend up by $5-10/t in the short term on restocking activities.

Further, an end-user or direct importer shared that the current price situation won't last long as "buyers are hesitant to accept high prices, which will automatically come down".

Imported scrap offers are even heard at $465-470/t levels; tradeable prices are still lower by $10-15/t.

SteelMint's assessment for shredded scrap in containers stands at $455-460/t CFR, up $10/t w-o-w. Prices are at a three-month high. A few deals were concluded last week before the holidays at $450-455/t levels.

The PKR remained unchanged for yet another week, closing at 226.6. As per the State Bank of Pakistan (SBP), the rupee fell slightly compared to last week.

Meanwhile, demand in the domestic market is yet to pick up, which has kept steel production low. However, steelmakers are hopeful that market sentiment will pick up later this year.

However, prices in the domestic market have improved significantly toward the month-end as most manufacturers have raised their finished steel offers to maintain adequate conversion spread.

Additionally, the temporary shutdown by large steel manufacturers occurred as banks restricted LCs, which not only halted infrastructure projects but also had an impact on allied industries, including cement and building materials, resulting in a slowdown in construction activity.

Domestic prices follow global cues

• Rebar prices continue to move up: Pakistan's major steel mills, like Mughal Steel and Amreli Steel, have started to follow global cues and raised rebar offers by PKR 5,000/t ($22/t) last weekend. Due to a shortage of raw materials, and keeping in view the current unstable economic conditions in Pakistan, the company has revised its rebar prices.
  
  

Current offers for G-60 (10-12 mm) are at PKR 222,000-225,000/t exw-Punjab ($978-992/t), including taxes. However, tradeable prices are still lower by PKR 3,000-5,000/t.

• Local scrap prices rise: Domestic scrap prices are at the highest levels since September 2022 due to tight supplies. Fresh offers for local scrap are at PKR 150,000-152,000/t exy-Punjab, up by PKR 5,000/t w-o-w.
  
  

Pakistan domestic prices

Outlook: Imported scrap prices are likely to remain high for the time being owing to tight supply and moderate transactions may take place to meet the immediate requirements of mills. However, near-term prices are difficult to predict as most trade channels are yet to resume activities, SteelMint understands.