Pakistan: Imported scrap prices fall by $5/t w-o-w; inquires rise amid restocking activity

• Mills expect margin improvement with interest rate and tariff cuts
  
  
• Market sees higher inquiries, with mills focusing on restocking scrap
  
  

In Pakistan, imported shredded scrap from the UK/Europe was being offered at $380-383/t CFR, with a few deals heard concluded at $376-380/t, whereas bids were heard at lower levels at around $373-375/t over the last seven days.

BigMint's weekly assessment revealed that European shredded was at $379/t CFR Qasim, dropping by $5/t w-o-w.

Market insiders report an increased re-stocking appetite in Pakistan, with further scrap imports expected due to taxation issues. More customers are entering the market.

Market scenario

A Karachi-based mill source said that commercial bala prices held steady last week, with a slight upward trend seen. Rebar prices also remained stable to slightly higher. Sales activity was fair, with positive sentiment for January. Customers are expected to take a more aggressive stance soon due to reduced production levels.

Another Karachi-based mill source shared that scrap prices are at PKR 143,000-144,000/t ($513-516/t), billet at PKR 208,000/t ($747/t), and bars at PKR 240,000/t ($862/t). Recently, 1,000 t of shredded scrap were bought from the UK at $378/t CFR Qasim, while 500 t of UAE shredded scrap were purchased at $400/t CFR.

Scrap arrivals from the UK and Europe have been disrupted, and during the winter holidays, UK/Europe shredded was priced between $385-400/t. Ten days ago, UAE shredded reached up to $410/t, but it's now down to $400/t, or possibly $397-400/t.

A market insider mentioned that with interest rates and electricity tariffs expected to decrease next month, mills are likely to benefit, helping them maintain and potentially improve their margins.

A trader source mentioned that while Pakistan's market remained relatively quiet last week, buyers are inquiring at higher price levels than India. As a result, suppliers are offering shredded scrap to Pakistan at $380/t levels or thereabouts. However, some Pakistani mills are trying to secure shredded scrap at $374-375/t.

A Sindh-based mill source commented that Pakistan's scrap market has shown some activity recently, with mills displaying interest in purchases. It's still uncertain whether this is driven by increasing steel demand or primarily for restocking ahead of February. Given this renewed interest, suppliers are likely to focus their offers on Pakistan.

A UK-based trader commented that the market remains under pressure as prices continue to soften. A recent deal saw 2,000 t of EU-origin shredded scrap sold at $383/t CFR Qasim, but buyers are now holding back, expecting further price declines. Current collection rates in Europe are around $330-332/t, and with freight costs ranging from $50-52/t, CFR prices are estimated at $380-382/t, which aligns with recent transaction levels.

Outlook

The market is expected to remain stable in the near term. If UK/Europe scrap prices hold in the $380s, UAE shredded prices may adjust to $393-395/t from $400/t. This could lead to temporary price stabilisation, followed by ongoing inquiries for restocking.