Pakistan: Imported scrap prices rise marginally by $3/t w-o-w owing to need-based buying

The imported ferrous scrap prices rose marginally in Pakistan on the week as buyers preferred to book material as per need basis. SteelMint's weekly average price assessment for imported shredded scrap reached $414/tonne (t) CFR Qasim, up by $3/t as against $411/t CFR a week ago.

While some transactions were finalised at $408-410/t CFR Qasim, current offers have been noted at up to $415/t CFR from Europe.

A representative from a steel mill mentioned, "The demand for imported scrap in Pakistan remains subdued, given that local scrap is available at approximately PKR 155,000-160,000/t exw, making it more economically viable for us compared to imported options. Consequently, our focus is on domestic procurement. Additionally, buyers are presently acquiring scrap on a need basis only."

Domestic market: Domestically, the scrap market in Pakistan is experiencing a downward trend amid price uncertainties and sluggish demand for finished steel. Local scrap prices saw a significant decline of PKR 15,000/t over the week, while rebar prices dropped by PKR 5,000-6,000/t w-o-w.

Industry sources have indicated that "The local scrap market in Pakistan is currently characterized by volatility and unpredictability, with fluctuations and a slowdown in buying activities."

For the 16th consecutive session, the Pakistani rupee experienced depreciation against the US dollar, with a 0.11% decline in the inter-bank market on Tuesday. According to the State Bank of Pakistan (SBP), the rupee concluded at 287.87, reflecting a decrease of PKR 0.32.

In October, car sales in Pakistan witnessed a substantial decline, dropping by 26% on a m-o-m basis and a remarkable 54% y-o-y, according to data released by the Pakistan Automotive Manufacturers Association (PAMA). Car sales declined from 8,400 units in September to 6,200 units in October. In comparison, sales in October 2020 were at a higher figure of 13,500 units.

Outlook

The market is anticipated to witness a slight uptick in offers due to the winter restocking process. However, the steel market demand is subdued, and there is a notable weakness in consumer demand for infrastructure, which is likely to impact the volume of imported scrap in the upcoming weeks.