Pakistan: Imported scrap trade remains slow, buyers await clarity

Pakistan's domestic steel market remained sluggish for yet another week. Steelmakers are cautious about purchases and imported scrap prices remained unchanged after rebounding last week. Dull finished steel demand kept buyers sidelined.

Imported scrap offers for UK-origin shredded were at $440-445/t CFR; however, no deals were heard this week. Prices unchanged d-o-d, while slightly up by $5/t w-o-w.

Steel mills are trying to destock scrap volumes amid the approaching monsoon season which weighs on finished steel consumption. However, the upcoming general budget for FY24 may offer some fresh hope to steel mills. The budget is likely to be announced in the second week of June.

Domestic prices under pressure

Steel producers are under pressure. In the last 10 days of every month, rebar prices edge down to maintain sufficient liquidity for smooth operations, as the end of every month is electricity billing period and there is need to sustain cash flow during this period.

However, workable offers for deformed grade 60 rebar (10-12 mm) have come down further by PKR 5,000/t to PKR 255,000-260,000/t exw ($888-905/t), including taxes.

Nevertheless, domestic scrap prices are still high due to material shortage in the market. Current offers for local scrap are hovering at PKR 185,000-190,0000/t ($645-662/t) exy - equivalent to shredded, down by PKR 5,000/t w-o-w.

Pakistan domestic prices

PKR depreciates

The Pakistani rupee remained under pressure as the US dollar appreciated in the currency exchange market. According to the State Bank of Pakistan, the dollar settled at PKR 287.8 compared with PKR 281.7 a week ago.