Pakistan: Imported scrap prices drop, buyers await clarity before resuming bookings

Pakistan's imported scrap market has seen a slow start after the one-week-long Eid holidays. Buyers and steelmakers were eagerly looking for a market trend. Imported scrap offers witnessed a marginal correction post-Eid.

• SteelMint's assessment for UK/EU-origin shredded stands at $470-480/t CFR Qasim, moving down by a significant $25-30/t w-o-w.
  
  
• Fresh offers for Dubai-origin HMS1 is at $515-520/t CFR levels.
  
  

Meanwhile, mills have old inventories in hand for the time being. Limited demand from end-users and heavy rainfall in many parts of the county have kept inventories high.

Market drivers

• PKR nosedives to all-time low: The Pakistani rupee has dropped to a record low against the US dollar with the exchange rate sliding to 221.74.
  
  
• Political instability: The political uncertainty in the country due to the by-elections in Punjab and the import payment pressure took the currency to its new low. Steel mills are waiting for a clear market direction as political changes may impact the market scenario.
  
  
• Labour shortage: The market is still soft after the Eid holidays, as labour hands are yet to return from the holidays. Moreover, it is the rainy season and no construction activities are happening at present, SteelMint understands.
  
  
• Domestic rebar prices firm, trade remains slow: Domestic rebar prices stayed firm despite limited demand from end-users. Most of the major mills kept their rebar offers stable as steel consumption remained slow after the Eid break. SteelMint's assessment for the G-60 rebar remained unchanged at PKR 228,000-230,000/t exy-Punjab.
  
  

Pakistan domestic prices

• Liquidity issue: Steel mills are likely to lower rebar prices next week as prices generally reduce towards month-end so that the maximum inventory can be sold to facilitate monthly payments.
  
  

Outlook

Pakistan's steel market sentiments are yet to receive positive signs and mills are yet to actively resume imported scrap bookings, as they are expecting a correction in Turkiey's and global scrap prices.