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Pakistan: Imported scrap prices edge up by $3/t w-o-w; cash crunch keeps steel market under pressure

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Melting Scrap

BigMint Bureau

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4 Feb 2025, 19:40 IST

Pakistan: Imported scrap prices edge up by $3/t w-o-w; cash crunch keeps steel market under pressure

Cash flow issues persist, but LC-backed mills report steady operations

Market remains subdued with no new government projects announced

Imported ferrous scrap prices into Pakistan inched up slightly w-o-w, with BigMint's assessment placing European/UK-origin shredded at $384/tonne (t) CFR Qasim, up by $3/t.

As per market participants, only a few buyers are interested in material from premium yards, and now suppliers are asking above $385/t CFR.

Market scenario

A market insider shared, "Local scrap prices stand at PKR 145,000-147,000/t ($520-527/t), billet at PKR 210,000/t ($752/t), and rebar at PKR 240,000/t ($860/t). We are closely monitoring the market--received an offer at $385/t but countered at $380/t. With sluggish local steel demand, raw material costs remain unviable at these levels, as we need to offer additional discounts to stimulate sales."

Another scrap trader informed, "Shredded UK is being offered at $385/t, while the local scrap market is around PKR 140,000/t ($502/t). Rebar prices range between PKR 240,000-250,000/t ($860-896/t), depending on payment terms."

Recent deals

Around 1,000 t of shredded from the UK sold at $385/t CFR Qasim.

Around 1,000 t of shredded was sold at $375/t CFR Qasim.

Around 2,000 t of EU-origin shredded was sold at $375/t CFR Qasim.

Around 1,000 t of shredded from the EU sold at $385/t CFR Qasim.

Around 500 t of PNS from Finland sold at $383/t CFR Qasim.

Around 2,000 t of the 210-211 mix (similar to HMS) from the EU sold at $350/t CFR Qasim.

A Sindh-based steel mill source said, "Suppliers are now quoting over $385/t for scrap. Domestic scrap stands at PKR 147,000/t ($527), billet at PKR 210,000/t ($752/t), and rebar at PKR 238,000/t ($853/t). Rebar sales have improved, but prices are yet to rise."

A Karachi-based steel mill official commented, "The market is quite stable with moderate rebar demand. Cash flow issues persist, but with a good LC flow we are not facing any challenge in opening LCs. Shredded UK is at $385/t, while rebar is at PKR 245,000/t ($878/t) on a cash basis and PKR 250,000-252,000/t ($896-903/t) on credit. Local scrap stands at PKR 143,000-144,000/t ($513-517/t)."

A Gujranwala-based steel trader said, "The construction industry remains slow, with demand lagging behind supply as fewer buyers are in the market. No fresh projects have been announced to drive new government-backed demand. Local scrap prices stand at PKR 142,000/t ($509/t) for cash and PKR 145,000/t ($520/t) for payment after delivery. Rebar G60 is at PKR 244,000-245,000/t ($875-879/t) ex-works."

Outlook

Market insiders anticipate another sluggish phase for the construction industry, with demand trailing behind supply as buyer activity remains weak and no new government-backed projects have been announced to drive fresh demand. However, regular restocking activities could push offers higher, as suppliers cite shortages in their domestic markets.