Pakistan: Imported scrap prices remain supported despite subdued steel sentiments
Pakistan's imported scrap trade has slowed down from the last 2-3 days after having seen active bookings from the beginning of last week. However, offers have moved ...
Pakistan's imported scrap trade has slowed down from the last 2-3 days after having seen active bookings from the beginning of last week. However, offers have moved up further by $5/tonne (t) to $550-555/t CFR Qasim basis.
SteelMint's assessment for shredded scrap import prices into Pakistan stands at $552/t CFR, up marginally by $5/t w-o-w.
Recent deals and offers
- Around 5,000-6,000 t of UK/EU-origin shredded scrap in containers was booked in the last couple of days at $548-550/t CFR Qasim.
- In another deal, 5,000 t of US-origin shredded material was booked at $540/t CFR Qasim last week, sources informed.
- UAE-origin HMS 1 was offerred at $520-525/t CFR Qasim levels.
Reasons behind slow trade -
- Subdued steel demand in north Pakistan: Steel demand from northern Pakistan (Lahore) has slowed down, owing to heavy smog in the winter season. Additionally, increasing Covid cases have also impacted the overall market activity.
- Electricity billing period in month-end: Last ten days of every month are due for all pending electricity bills. Hence, major steel mills are in trouble due to liquidity issues in the market which may lead to further reduction in rebar offers.
- Local rebar prices inch down: Local steel prices dropped slightly for G-60 (10-12mm) grade to PKR 187,000-188,000/t exw ($1,062-1,068/t), including taxes. However, a few deals even happened at lower levels of PKR 185,000-186,000/t exw ($1,051-1,057/t). Offers have been lowered due to smuggled and tax exempted rebar, which is available at more economical rates, in the FATA/PATA area. The local market is still struggling to recover from the foggy and snowy weather. Adding to the woes is the recent spike in Covid cases in Karachi, weighing on rebar demand. However, scrap shortage in the local market has kept offers supportive. Prices for high grade scrap (equivalent to shredded) are at PKR 125,000/t levels ($710/t) exy-Punjab, up by PKR 1,500/t ($9/t) w-o-w.
Pakistan domestic prices
PKR gains against the dollar: The Pakistani rupee (PKR) gained value against the dollar this week. Currently, the Pakistani rupee is trading at 175.9 levels against 176.47 recorded last week.
Outlook: Participants anticipate that the market will remain supported as imported scrap bookings are expected to see an improvement on lower inventories with the mills, given the expected rebound in construction steel demand in Feb-Mar'22.