Pakistan: Imported scrap trade sluggish ahead of Ramadan holidays, political instability

• Mills lift rebar offers by PKR 7,000/t ($38/t)
  
  
• Ramadan likely to limit working hours from next week which may keep trade subdued
  
  
• PKR hits a new low against $
  
  

Imported scrap trading activities in Pakistan have remained slow for yet another week. Political instability, upcoming festive holidays and currency devaluation have collectively resulted in a lowering of bookings. Limited deals have been reported in small quantities during the seasonal run-up to the Ramadan month. Fresh offers for UK-origin shredded in containers are at $655-660/t CFR Qasim levels. while the bids are comparatively lower at $635-640/t levels.

In a recent deal concluded, around 2,000 t of shredded high-seas cargo have been booked at $640-645/t CFR Qasim basis.

Offers for UAE-origin HMS 1 are being quoted at $615/t CFR Qasim levels. Buyers are booking fresh slots only when they are "hand- to-mouth".

Factors behind slowdown in imported scrap bookings

• PKR sets new price low: The US dollar kept its dominance in domestic markets against the Pakistani rupee (PKR) and appreciated further. The national currency continued to set new record lows against the dollar. Currently, the PKR is being traded at 182.49 against the dollar.
  
  
• Approaching Ramadan holidays: The upcoming Ramadan holidays from early next week are likely to limit bank working hours which may limit scrap and steel trade activities.
  
  
• Political instability: With several defections from his party in recent weeks, Prime Minister Imran Khan is facing a tough time proving his party's majority on the floor of the House. The looming political instability is another factor that has kept back buyers who are awaiting clarity on the market.
  
  

Mills lift rebar offers

Pakistan's domestic leading steel mills have raised rebar prices by PKR 7,000/t ($38/t) this week. Domestic rebar offers for G-60 (10-12mm) grade are now set 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 Price

Interestingly, this is the second sharp price hike that pushed the rebar prices to an all-time high of PKR 216,000/t thus affecting construction activities across the country.

Outlook

The imported scrap trade and domestic market sentiments are likely to remain slow ahead of the Ramadan month and against the backdrop of the currency devaluation.