Pakistan: Imported scrap trade yet to pick up amid sluggish steel sentiments

The imported scrap trade in Pakistan continued to remain slow as finished steel market sentiments were sluggish. Mills are waiting for a clear direction for the next round of booking for Mar'22 shipments.

Considering the slow market trend, imported scrap bids have declined slightly by $5-10/t w-o-w. Offers for UK/Europe-origin shredded scrap in containers stand at $560-565/t CFR Port Qasim. However, a few mills booked small quantities at these levels.

• In a recent deal, a decent quantity of UK-origin shredded material has been booked at $560-562/t CFR Qasim basis.
  
  
• UAE-origin HMS 1 is being offered at $535/t CFR Qasim, up by a further $5/t w-o-w. However, deals remained absent.
  
  

Reasons behind slow market

SteelMint, last week, already highlighted a few prominent reasons which slowed down market activities:

• With consumption from end-users being slow, rebar inventory with the mills has increased.
  
  
• Most mills have cut their finished steel production as rebar inventories are piling up.
  
  
• Meanwhile, mills are holding back from placing new orders for imported scrap as they await an improvement in finished steel sales.
  
  
• Despite the improved weather condition, finished steel demand is yet to improve as expected.
  
  
• The steel market turned dull due to liquidity issues. The billing period will start in the last week of the month.
  
  

Domestic rebar prices inch down

Pakistan's domestic rebar prices remained more or less the same for yet another week as demand from end-users was still weak. SteelMint's assessment for domestic G-60 rebar stands at PKR 185,000-186,000/t exw-Punjab ($1,049-1,054/t), including taxes, down by PKR 1,000-1,500/t ($6-8/t) w-o-w.

Pakistan domestic prices

Outlook: Mills anticipates a further increase in demand in the coming days as February is traditionally slow in terms of steel consumption. Imported scrap bookings are likely to increase in end February-early March before Ramadan starts in April which may increase steel consumption.