Pakistan: Imported scrap prices remain rangebound; domestic prices decline amid weak demand

• Domestic rebar, billet prices drop amid weak sales
  
  
• Moderate restocking activities seen before winter holidays
  
  

Imported shredded scrap from the UK and EU remained stable, with offers at $385-386/t CFR. Some deals were concluded at $377-383/t under the restocking cycle, and some bids started to arrive as low as $375-377/t, although strong resistance was seen from sellers with offers over $385/t.

BigMint's weekly assessment indicated that European shredded scrap stood at $381/t CFR Qasim, slightly down by $1/t w-o-w.

Rebar, billet, and bala prices in the Gujranwala region have dropped sharply due to ongoing weak market conditions. Despite mills operating at only 40-50% of their capacity, demand continues to remain sluggish. The lack of construction activities and low sales volumes have put further pressure on local steel producers, leading to reduced production levels and limited market activity.

Earlier last week, rebar prices remained stable for a couple of days as mills adjusted their production levels to align with subdued demand. However, on-the-ground sales have yet to materialise, with actual market activity still lagging behind expectations.

Market scenario

As per a Karachi-based steel mill, "Rebar prices are stuck at PKR 242,000-246,000/t ($869-884/t), but the sluggish domestic market offers little relief. Local scrap trades are being heard at PKR 140,000-142,000/t ($503-510/t), while imported scrap offers from premium yards stand firm at $385-390/t CFR. However, buyers are bidding lower at $375-378/t, reflecting cautious sentiment."

A market insider commented, "Mill operations are currently at just 40% capacity but sales remain sluggish. The lack of ongoing projects and construction activities has left mills struggling to find buyers. Many mills have shut down, while the rest are operating at minimal levels due to heavy losses. They simply can't cover their fixed costs, making it difficult to sustain operations."

As per industry insiders, the local market has been impacted by a drop in scrap prices, now at around PKR 5,000-6,000/t ($18-22/t). Current prices stand at PKR 238-241,000/t ($855-866/t) for bars, PKR 205-207,000/t ($737-744/t) for billets, and PKR 138,000-140,000/t ($496-503/t) for scrap.

A Punjab-based scrap importer commented, "The decline in international scrap prices from $410/t to $380/t over the past two months is now being fully reflected in domestic scrap and finished prices. As import shipments priced at the lower rate are starting to arrive at the port, buyers are beginning to hesitate due to the higher rebar and billet price tags."

A trader said that the domestic market is currently facing challenges, with rebar sales remaining weak and global scrap sentiment also under pressure. As a result, suppliers are offering UK/EU shredded scrap at $385-386/t and UAE HMS mixed with PNS at $388-390/t.

As per a domestic trader source, domestic prices reflect this downward trend, with rebar priced at PKR 240,000/t ($880/t), local scrap at PKR 140,000/t ($510/t), billet at PKR 206,000-207,000/t ($740-755/t), and Bala at PKR 188,000-190,000/t ($711-719/t).

Outlook: Market participants anticipate some restocking activity this week ahead of the upcoming holiday period. Additionally, the law and order situation has remained stable, providing some support to market sentiment.