Pakistan: Rebar price cuts subdue imported scrap market

The imported scrap market in Pakistan remained quiet for yet another week after mills pulled down rebar offers sharply on subdued demand amid current weather conditions. Major steel mills in southern Pakistan lowered rebar offers by PKR 5,000/tonne ($28/t) towards the end of last week, SteelMint learnt from sources. Domestic G-60 rebar prices moved down to PKR 186,000-187,000/t exw- in Punjab ($1,054-1,060/t), including taxes. However, only limited deals happened at lower levels of PKR 186,000-187,000/t exw ($1,054-1,060/t).

Following the drop in rebar offers, mills turned cautious in raw material purchases, which, in turn, made them less active in imported scrap bookings.

Recent deal and offers

• Around 2,000 t of UK/EU-origin shredded scrap in containers were booked at $549/t and $550/t CFR Qasim last week-end, sources informed.
• SteelMint’s assessment of shredded scrap import prices into Pakistan stand at $545/t CFR, down by $5/t w-o-w.
• 2,000 t of UK-origin distressed cargoes sales for shredded scrap were heard at $535/t, CFR Pakistan.
• UAE-origin HMS 1 was quoted at $510-515/t CFR, registering a dip of around $5-10/t w-o-w.

Reasons behind dull market 

• Subdued steel demand in northern Pakistan: Steel demand from northern Pakistan (Lahore) has slowed down, owing to heavy smog in winter. Additionally, increasing Covid cases have also impacted overall market activity.

Pakistan domestic prices

• Local scrap prices down further: Local scrap prices dropped further on limited demand. Prices decreased by PKR 4,000-5,000/t ($23-28/t) to PKR 120,500/t levels ($684/t) exy-Punjab for high grade scrap (equivalent to shredded).
• PKR depreciates against dollar: The Pakistani rupee (PKR) depreciated against the dollar this week. Currently, the Pakistani rupee is trading at 176.4 levels against 175.9 recorded last week.
• Mills hold back bookings: Pakistan’s imported scrap inquiries have slowed down as buyers are holding back purchases, anticipating price correction in the near term. Buyers are enquiring for imported scrap at cheapest possible rates from distressed cargoes which is putting pressure on the market.

Outlook

Market participants are in wait-and-watch mode as this week’s market would remain silent and further price corrections are expected. However, mills expect construction activities to gain momentum in February which may bring some optimistism back into the market.