Pakistan: Imported scrap trade remains subdued as mills turn cautious

The ongoing Ramadan month and current political instabilities have slowed down Pakistan's imported scrap trade, although offers had been mostly firm in the last couple of weeks. Buyers are likely to wait and watch for clear market directions. Mills have cut production and using local scrap wile the imported scrap inventory is quite less at present.

• Fresh offers for UK-origin shredded in containers are at $655-660/t CFR Qasim levels, while bids are $650/t CFR levels.
  
  
• Few deals for around 6,000 t of shredded were booked at mentioned prices last week.
  
  
• Dubai HMS 1 is being offered at $600/t CFR Qasim levels.
  
  

Factors leading to slow market

• Traditional slow month: Ramadan, traditionally a slow month, has turned the market sluggish. People undertake fasting during this holy month. Banks' working hours get reduced, while the steel mills usually cut production.
  
  
• Political instability: The ongoing political uncertainty kept the market unstable and participants are eager to know how the new dispensation will impact the steel industry.
  Meanwhile, government-funded construction projects are on hold due to demand and supply mismatch. Pakistan's Parliament chose Shehbaz Sharif as Prime Minister on Monday, completing the ousting of predecessor Imran Khan in a political crisis that has sparked street protests and mass resignation of lawmakers.
  
  
• PKR gains against $: The Pakistani rupee gained value last week, after witnessing a continuous depreciation in the last couple of weeks. Currently, the PKR is trading at 181.78 against 184.86 recorded a week ago.
  
  

Mills hold rebar offers

Pakistan's domestic leading steel mills kept rebar prices unchanged for the third successive month for G-60 (10-12mm) grade at PKR 216,000/t exw-Punjab ($1,184/t), including taxes. However, workable prices are at PKR 200,000-204,000/t exw ($1,095-1,117/t).

Pakistan domestic rebar prices

Currently, mills prefer local scrap over imported one, SteelMint understands.

Outlook: Mills may turn active for imported scrap bookings in the coming week amidst low inventories.