Pakistan: Will mills lift rebar offers further on rising imported scrap prices?

Imported scrap prices in Pakistan have risen by $10/t compared to the closing of last week. Although not many deals have been heard at these levels, with limited signs of price corrections, market participants are hopeful that mills will resume bookings shortly. It would be interesting to see if mills raise rebar offers too considering the recent hike in imported scrap offers along with the Pakistan rupee (PKR) depreciation against the dollar.

"Steel Mills' scrap buying slowed down from last weekend. But, from yesterday onwards, inquiries have increased again. Interestingly, suppliers have resisted further lowering of offers, which shows limited chances of downward price correction in the near term," said a Pakistan-based scrap trader.

Recent offers

• Fresh offers for UK/EU-origin shredded are now available at $520-525/t CFR Qasim levels, while a majority of bids are at $520/t.
  
  
• HMS1 from UAE is being quoted at $510-515/t CFR Qasim levels.
  
  

"The Pakistani rupee devaluation kept scrap buyers under pressure. At the current exchange rate of PKR 170.9 to the dollar, the currency is already trading at an all-time low," said a prominent scrap buyer.

Domestic billets prices up, re-bar may follow: With the recent rupee depreciation, its expected mills may raise G60 rebar offers due to a hike in scrap prices. If the steel mills increase rebar prices, eventually the end-users may be unable to bear the burden of high prices and rebar sales would be affected. Hence, rebar prices are under pressure .

SteelMint's price assessment for G60 rebar in Pakistan's Punjab region stands steady at PKR 173,000-174,000/t exw, up by PKR 1,500/t w-o-w.

Outlook
Although market players are awaiting clarity, buyers may have to lift bids to match with the offers.