Pakistan: Mills defer bookings on hopes of further decline in imported scrap offers

With the fall in Turkish imported scrap prices in recently-concluded deals, Pakistan-based mills went into wait-and-watch mode for clear price directions. Ferrous scrap import prices into Turkey have fallen by around $5/tonne (t) in four recently-concluded deals for Sept'21 shipments.

Pakistani scrap buyers too, expect to see a further correction in imported scrap prices, hence limited deals were reported so far this week. Additionally, buyers will likely bid below $520/t levels for imported scrap from now onwards, SteelMint learnt from market sources.

Few trade sources expect prices to fall slightly and don't foresee a significant correction while others expect a further correction.

"Mills in Pakistan are holding back from fresh bookings for imported scrap as they want to see whether prices have bottomed out or is there scope of a further decline," said an active Pakistani market player.

On the other hand, the Pakistani rupee (PKR) has depreciated further to 164.2 levels versus the dollar as compared to 163 levels seen a week ago, which is making imports costlier.

Recent deals and offers-

• Around 5,000 t of imported shredded scrap in containers have been booked recently from the UK and the US at around $520-525/t and $530/t CFR levels, respectively.
  
  
• Fresh offers for UK shredded are being quoted at $530-535/t CFR levels.
  
  

Domestic steel prices inch up: Rebar (G-60) prices have increased significantly by PKR 3,000/t to PKR 165,000/t exw-Punjab, and are likely to go up further. Prices increased against last week due to recently fixed values for sales tax by the government for imported scrap which has impacted steel mills.

Construction activities have been impacted in and around Islamabad due to heavy rains while increasing Covid cases in Karachi has led to a partial lockdown recently.

Local scrap (equivalent to shredded) prices have remain unchanged at PKR 108,000/t exy-Punjab.

Outlook
It is expected that active bookings in Pakistan would happen later this week due to a two-days holiday ahead of Muharram next week.