Pakistan: Imported scrap prices dip on limited buying, further correction likely

Pakistan’s imported scrap prices have fallen in deals concluded recently. Market players are not very active at the moment which resulted in limited trade, SteelMint understands. Furthermore, many market insiders believe that prices are likely to come down in the coming days.

Market sources said that, “Iron ore prices have dropped recently. Hence, people foresee imported scrap prices coming down further. Additionally, many offers have been opened up for Pakistan with the Indian market turning quiet, shifting suppliers’ and traders’ interest towards Pakistan. The increased number of offers for shredded will automatically reduce prices in the imported market.”

Recent offers

• Fresh offers for the UK/EU-origin shredded material are being quoted at $525-530/tonne (t) CFR Qasim, down by $5/t against last week. Deals of 1,000-1,500 t are heard to have been concluded at these levels, sources confirmed.
• Another UK-origin 2,000 t of high seas-based material has been booked at $516/t CFR Qasim.
• UAE-origin HMS 1 prices remained stable at $500-505/t CFR Qasim, amidst limited trade.

Factors behind decline in imported scrap offers

• Turkey’s imported scrap prices fall in recent deals: A US-origin cargo, comprising of 30,000 t of HMS 1&2 (95:5), was booked by a Mediterranean region-based steel mill at $444/t CFR. Around 5,000 t of PNS grade scrap was booked at $454/t CFR. In another deal, a UK-origin cargo, comprising HMS 1&2 (90:10), was booked by a Mediterranean region-based mill at $443/t CFR.
• China’s iron ore spot prices continue to fall: The spot prices of the iron ore benchmark Fe 62% fines fell further by $6.15/t to $122.6/t CFR China on 13 Sept’21. Bearish sentiments in the Chinese steel market, a weak demand outlook and an increase in supply of spot cargoes have collectively dragged spot prices down. Premiums and discount levels for medium-grade fines weakened further on the bearish demand outlook in China.
• Prices edge down in neighbouring markets: India’s ferrous scrap imports market remained under pressure on bids-offer disparities. However, a few deals have been finalised recently, sources confirmed. Around 2,000 t of UK-origin shredded scrap was traded at $520/t CFR, Nhava Sheva. In another deal, around 3,500 t of UAE-origin HMS (80:20) has been concluded at $460-470/t CFR Mundra.

Domestic steel prices in Pakistan largely stable: Domestic steel prices were more-or-less same as last week. In fact, steel mills are under pressure to cut prices. “The market is good and demand is stable,” said a major market player. Many steel mills have older-priced inventory. Until the old inventory clears, which would probably take another 10 to 15 days, the market can see good demand, he added.

SteelMint’s price assessment for rebar in Pakistan’s Punjab region stands steady at PKR 174,000/t exw, unchanged w-o-w.

SteelMint’s assessment of local shredded scrap prices moved up by over PKR 3,000/t on scarcity in the local market. The price stands at PKR 115,000/t exy-Punjab.