Pakistan: Imported scrap prices up $20/t in post-Eid trades

• Deals of 5,000t of imported shredded reported at increased offers.
  
  
• Mills lift rebar offers by PKR 5,000/t on higher production costs.
  
  

With the resumption of trading in the scrap markets post-the Eid holidays, imported scrap prices in Pakistan have risen significantly by around $20/tonne (t) week-on-week (w-o-w) in a few trades reported recently.

Pakistan's mills recently booked around 5,000 t of shredded scrap in containers at around $525/t CFR Port Qasim, reliable sources confirmed to SteelMint.

SteelMint's assessment for UK/EU-origin imported shredded scrap now stands at $526/t CFR Qasim levels, registering a sharp hike of $20/t w-o-w.

Imported scrap trades have remained slow since the last few weeks as the just-concluded Ramadan month and Eid holidays had kept market activities low.

Recent trades & offers

• Fresh offers for imported scrap are being quoted at $530/t CFR Qasim levels.
  
  
• Offers for Dubai-origin HMS were heard at $520-525/t CFR Port Qasim.
  
  

Domestic rebar offers spurt by over PKR 5,000/t ($33/t) post-holidays:
Pakistan's steel mills sharply increased domestic G-60 rebar offers by around PKR 5,000/t ($33/t) post-Eid holidays, when the markets resumed. G-60 rebar prices are being cited at PKR 140,000-143,000/t exw-Punjab. However, the market is yet to accept these price levels and the actual trading rate of G-60 rebar is hovering around PKR 135,000-138,000/t levels, sources informed SteelMint.

Due to the shortage and hike in raw material costs, further supported by international prices, steel mills have increased rates. The market is very uncertain and small players are facing issues on payments. Some of the smelters in Punjab are actually planning to shut down their mills because of the huge jump in scrap prices, SteelMint has learnt.

According to SteelMint, G-60 rebar prices in the Punjab region stand at PKR 137,700/t exw-Punjab, up by PKR 5,700/t ($37/t) compared to prices reigning at the beginning of last week.

"Ship breaking activities are closed due to Covid restrictions. So, there is a scarcity of local scrap, and mills may either shut down or reduce their production levels. Mills have raised rebar offers for finished steel but have not sold anything and chances of sales are less due to the hot weather and limited construction activities," a prominent buyer said.

The local market has not resumed in most regions and sentiment is still low. It was heard that local scrap generation is closed right now but people are quoting offers at PKR 92,000-94,000/t exy-Punjab.

Outlook
Finished steel demand is yet to pick up. Steelmakers expect that demand will likely pick up before the start of the monsoon season, while few participants are waiting for prices to stabilise and more clarity on the market.