Pakistan: Imported Scrap Offers Decline; Mills Observe Production Cuts

Imported scrap offers to Pakistan have dropped sharply over the period of last one week, as global prices have collapsed successively in recent Turkish conclusions since mid of last week. However, in spite of the price fall, the steel production cuts induced by the severely low domestic steel demand, is keeping the buying interest of imported scrap and raw materials limited.

SteelMint’s assessment for Shredded 211 scrap from UK/Europe currently stand in the range of USD 283-285/MT CFR, significantly down by USD 10-12/MT against price levels during early last week, while prices have fallen by USD 5-7/MT in comparison to closing of last week.

Although few bookings of Shredded were concluded at USD 284-285/MT CFR, but on an overall basis, limited demand on slow market has left buyers with decent inventories and no restocking urgency, while several mills bidding at USD 278-279/MT for shredded in anticipation of further drop in global prices.

“It is almost certain now that offers will go below USD 280/MT levels, given the current market scenario, and hence the bids by most mills are reasonable” shared a steelmaker from Karachi region.

HMS offers from UAE declined by over USD 5/MT on a weekly basis, amid downward market and slow inquiries from buyers. HMS 1 super from Dubai is currently being offered at around USD 275-280/MT CFR Qasim, against USD 283-284/MT levels last week. Additionally, HMS sarya/PnS from Dubai is now reported at USD 285-290/MT CFR on low demand.

Domestic scrap prices in Pakistan inch up – Local scrap inched up by PKR 1500/MT and being offered at PKR 65,000/MT (eq. to shredded) ex mill Punjab amid tight availability. Bala billet prices also moved up by the same margin.

It is reported that several mega infrastructure projects in Pakistan have been temporarily halted recently due to mostly Chinese staff keeping away on coronavirus risk. These projects being the most important of steel in Pakistan, have severely pulled down the already subdued domestic steel demand in Pakistan, resulting in production cuts by many mills in Punjab region. A source shared that almost a majority of mills in Gujranwala have either closed their furnaces or cut down their production.

Meanwhile, domestic finished steel offers continue to be unchanged for 3 weeks now. In the northern region, rebar’s average offer prices were reported at around PKR 105,000-106,000/MT, ex-works (USD 679-686), while southern (Karachi region) steel mills are offering at PKR 107,000/MT (USD 692) ex-works.