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Pakistan: Imported scrap prices edge up by $2/t w-o-w; inquiries rise amid local material shortage

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Melting Scrap

BigMint Bureau

87 Reads

28 Jan 2025, 20:32 IST

Pakistan: Imported scrap prices edge up by $2/t w-o-w; inquiries rise amid local material shortage

Interest rate cut boosts domestic market sentiments

Shortage of domestic scrap supports demand for imported scrap

Imported ferrous scrap prices trended up w-o-w, with BigMint's assessment placing European/UK-origin shredded at $381/tonne (t) CFR Qasim, up by $2/t.

In Pakistan, imported shredded from the UK/Europe was offered at $381-382/t CFR, and a few deals were heard concluded at $378-380/t, with bids improving to $375-376/t over the last seven days. The rise in bids followed increased inquiries, driven by a shortage in scrap availability.

Imported market scenario

As per certain market insiders, restocking activity for shredded took place at $376-380/t, with offers inching up to $385/t. However, buyers still targeted older price levels of $375-376/t.

Another source stated that offers for EU-origin shredded were stable at $382-384/t CFR Qasim, while shredded and PNS mix from the UAE was at $395-400/t CFR Qasim. He offered UK-origin shredded at $383-385/t CFR Qasim, with no inquiries received, and UAE-origin shredded at $395/t CFR Qasim, which was also unsold.

A Karachi-based mill shared that tradable levels for shredded from the UAE were reported at $395-400/t, with only a few buyers securing minimum quantities at the start of this week. The Middle East market remained steady, and sellers wrapped up last week with strong order books.

Domestic market sees positive sentiments

The domestic steel market was optimistic over the week, supported by a 1% interest rate cut, which led to positive signals. Rebar demand improved, although prices were stable or dropped slightly in certain regions.

A source from a mill in Karachi shared that overall finished steel prices declined to PKR 239,000-240,000/t ($856-860/t), while billet tags were slightly higher w-o-w at PKR 210,000-211,000/t ($752-755/t) exw. A market insider noted that there was a clear distinction between prices for cash and credit payments in rebar and billet sales.

Domestic scrap prices rose sharply to PKR 146,000-147,000/t ($523-527/t) amid shortages in the local market. This shortage also increased demand for imported scrap by major mills.

As per industry reports, Pakistan has launched the India North Europe Express (INX) maritime service, a direct shipping route designed to improve trade connectivity and reduce transit times to key European markets, including London Gateway, Rotterdam, Hamburg, and Antwerp. The service, starting 5 February, will operate weekly from Karachi, linking ports in India and Sri Lanka to these destinations.

Using 6,000 TEU container ships, the service will complete roundtrips in just 11 weeks, significantly cutting transit times. This new service will streamline the shipment of goods from Pakistan to Europe, enhancing trade efficiency. The INX service marks a major step in strengthening Pakistan's trade network and expanding business access to European markets.

Outlook

The limited availability of domestic scrap, coupled with steady demand for finished steel, is expected to drive better import activity. Prices may rise further, as scrap availability is expected to remain tight next month.