Imported scrap offers to Pakistan have been softening since last weekend. Although, offers from yards are still at high levels, high-seas cargoes seem to have kept prices under pressure.
Moreover, Pakistani buyers are less interested in booking fresh cargo at these levels, looking for prices to come down. On the other hand, buyers are holding fresh bookings and are likely to opt for domestic scrap at workable price levels.
Meanwhile, no confirmed deals have been reported in the last 3-4 days, owing to stocked-up inventory with the steel mills, SteelMint learnt.
Key reasons behind decline in imported scrap prices
- High seas offers have come down, putting pressure on traders and suppliers as yards offers are still at high levels.
- Traders are desperate to sell their material at high levels before the prices come down further.
- Last 10 days of the monthly electricity payment cycle has slowed down scrap bookings. Bill payments have left the mills with less cash.
- Chinese iron ore and steel futures have come down, injecting uncertainty in the market .
- Pakistani rupee has devaluated to PKR 158 against PKR 153 recorded a month ago as compared to the dollar. This has made imports costlier, thus keeping mills away from booking imported scrap actively.
Shredded offers are being quoted at $530-535/t CFR levels, while high seas scrap offers are at $525-530/t CFR Qasim levels. Few deals were concluded at $535/t for around 500-1,000 t shredded towards the middle of last week.
Domestic steel prices yet to match scrap prices: The local market is more or less same as last week. Rebar grade-60 prices rose against last week. Currently, rebar is being offered at PKR 144,500-145,000/t exw-Punjab due to lower demand. However, PKR 140,000-142,000/t are still workable price levels, though these are quite low when compared to high imported scrap prices and low steel demand, SteelMint notes. SteelMint’s assessment for local scrap stands at PKR 94,500/t exw-Punjab, down by PKR 500/t w-o-w.
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