Pakistan: Imported scrap trades remain limited on bid-offer disparity

• Yards are yet to lower offers significantly on expectations of lower availability of distressed cargo
• Imported scrap trades expected to pick up ahead Ramadan holidays
• Domestic steel prices remain range-bound

Distressed cargo sales of imported scrap continue to keep Pakistan’s imported scrap prices under pressure.

“Around 3,000-4,000 t of imported shredded scrap in containers have been sold at $430/t CFR Qasim basis towards the end of last week. Whereas, some material from distressed cargo has been booked at $435-437/t CFR basis. On the other hand, yards are not lowering offers as they expect distressed cargo stock to be over soon”, a reliable source has shared to SteelMint.

Imported scrap offers continue to dip in Pakistan, however few deals in small quantities continued to happen. The market is under pressure now, not many buyers are active in the market at the moment, due to an unsupportive domestic market. However, market insiders believe that activities may increase before the Ramadan month starts.

Fresh offers from yards are being quoted at $440/t CFR levels for Shredded, while traders are offering around $430-435/t levels or even below that. Mills are bidding around $420-425/t, CFR levels.

• SteelMint’s assessment for UK/EU origin containerised shredded stands at $433/t CFR Qasim levels, down by $15/t w-o-w
• Offers for Dubai origin HMS 1 are being quoted at $420-425/t CFR Qasim level, down by $10 w-o-w. However, no firm buying interest was reported at these levels

Domestic steel prices remain range-bound– Upcoming Ramadan month would increase domestic steel demand and prices in the coming next few days. Currently, the finished steel market has slowed down on disparity between finished steel prices and imported scrap price margin. Whereas, due to the tight availability of scrap in domestic market, prices have moved up slightly to PKR 89,000/t exy.

According to SteelMint assessment, prices for G-60 rebar in Punjab region stand stable at PKR 129,500/t exw, down by PKR 500/t w-o-w.

Outlook– Imported scrap market has observed mixed sentiments from market insiders. Few trade sources expect that due to tighter availability of domestic scrap, buyers may go for imported scrap. However, few market participants believe that local scrap is still cost-effective compared to imported scrap. However, SteelMint anticipates imported scrap trades to pick up in the 2nd half of this week.