Pakistan: Steel mills await correction in imported scrap offers

Pakistan's imported scrap inquiries have slowed down as buyers are holding back purchases, anticipating price correction in the near term. Offers have moved down after consecutive hikes in past few weeks. However, few trades were reported by the trade sources. SteelMint's assessment for Shredded 211 scrap in containers from UK/Europe stands at $320-325/t CFR Qasim, down by $3 w-o-w.

"Customers are enquiring for imported scrap at cheapest possible numbers, but some buying activity is expected in the current week" shared a trader based in Pakistan.

Recent imported scrap deals and offers-

• Around 2,000 t of shredded and 2,000 t of 4a/4c bundles in containers from UK have been booked at $317/t and $328-330/t CFR basis respectively.
  
  
• While in another deal, a steel mill has booked shredded in containers at $323/t CFR basis, towards last week's closing.
  
  
• Few global suppliers have quoted $325-328/t CFR Qasim (in containers) from UK/European origin Shredded.
  
  
• Low quality of shredded is being offered at around $316-320/t CFR Qasim level, down by $9/t w-o-w.
  
  
• Offers for HMS 1&2 (80:20) remained stable at $300-305/t CFR Qasim, (w-o-w basis) in containers, from various origins. While very few trades were reported at this level.
  
  
• Offers for another scrap grade from Dubai is also reported this week, as MS Turning at $285/t CFR basis.
  
  

"Domestic finished steel prices are still depressed, but trade activity is picking up and we foresee domestic prices to increase towards end-Sept'20", shared by Pakistan based steel maker.

According to Privatisation Minister- Pakistan Steel Mills (PSM), Mari Petroleum Company Limited (MPCL), and Convention Centre Islamabad are among the 19 state-owned entities that will be privatised, as per reports. This could be another reason steel makers remaining less active in imported scrap trades, due to privatisation and many steel mills may have reduced their production levels.

Domestic market overview - Domestic scrap prices have slightly increased over a week. However, major steel mills have adjusted their steel price to cover the maximum share in the market, thus rebar offers have witnessed a slight reduction this week.

Pakistan domestic steel prices as on 15th Sept'20