Pakistan: Imported scrap prices track bearish global trends

Pakistan's imported scrap market was quiet this week, traking bearish global trends amid measured finished steel demand in the domestic market along with LC opening issues, which was largely in sync with Turkiye's scrap buying behaviour.

Turkiye's imported scrap prices slipped in a recently concluded deal. A North European bulk scrap cargo, comprising HMS (80:20), has been booked at $380/t CFR.

Offers for UK/Europe-origin shredded scrap in containers stand at $445-450/t CFR, unchanged w-o-w. However, buyers are still bidding at $440/t CFR levels.

Prices are likely to remain stable and a sharp correction is unlikely owing to the approaching winter holidays.

Domestic prices up

• Major mills raise rebar offers: Major steel mills in Pakistan hiked rebar offers by PKR 2,000-3,000/t ($9-13/t) a couple of days ago. Prices increased due to a severe disruption in the supply chain and continuous rise in domestic raw material prices. Offers for G60 rebars are at PKR 205,000-208,000/t exw-Punjab ($/t). On the other hand, steel demand is still weak.
  
  
• Local scrap prices up: Domestic scrap prices continued to edge up due to material shortages and continuous hike in prices. Fresh offers for local scrap are at PKR 135,000/t exy-Punjab (equivalent to shredded). Buyers are cautious about continuously increasing prices and low demand for finished steel.
  
  

Pakistan domestic prices

Domestic market updates

• PKR struggles for stability: The national currency, the Pakistani rupee (PKR), has remained stable over the past four weeks. The currency is being traded at 225.9 against the dollar.
  
  

Initiatives such as diversifying sources of raising domestic finances for investment in prioritised manufacturing sectors and encouraging capital spending on the energy sector to eliminate foreign crutches will take a bit longer. However, these steps will not be enough for the turnaround of the economy and sustained and inclusive growth.

• Toyota to suspend production: Toyota Motors has notified the Pakistan Stock Exchange that it will suspend production from 20-31 December. This will be the third time that Toyota will observe non-production days in 2022.
  
  

Toyota has cited insufficient inventory levels due to the State Bank's restrictions on imports of completely knocked-down (CKD) tools as the main reason for its actions. The company had previously halted production from 1-16 September and 1-13 August due to the same reasons. Nevertheless, Suzuki and Honda had also previously cited the same reason for the 20 and 15 non-production days the two had observed, respectively.

• Punjab government to produce energy from waste: The Punjab government has expressed interest in establishing a power plant that would convert waste into energy. The chief minister further claimed that the project will result in more than 50% reduction in the cost of producing electricity. However, no evidence is available to corroborate this claim.