Pakistan: Imported scrap trade likely to pick up amid tight domestic supply

As the market resumed after Eid holidays, mills actively secured domestic material to fulfill immediate requirements, leading to material shortage. Domestic scrap (equivalent to shredded) is now available at PKR 122,000-125,000/t exy ($606-620/t) levels, moving up slightly by PKR 2,000-5,000/t ($9-24/t) w-o-w. Due to limited supplies in the domestic market, and less inventories of imported scrap, buyers may return to the imported market, SteelMint notes.

Meanwhile, this week, imported scrap trade in Pakistan remained slow amid expectation of further price corrections. Imported offers fell by over $15-20/t w-o-w to around eight-month low, as per SteelMint assessment.

However, a few market sources believe that mills will resume active imported bookings for July shipments soon amid limited stocks.

Recent deals and offers

• 1,000 t of UK-origin shredded in containers have been booked at $510/t CFR levels.
• Another 2,200 t of UK-origin shredded scrap deal was concluded at $515/t, CFR Pakistan.
• Fresh offers for UK-origin shredded were around $510-515/t CFR Qasim levels, down by $15/t w-o-w. A few more deals for around 3,000-4,000 t of the same material were also heard to have been booked at $515-520/t CFR, Qasim basis last weekend.

Meanwhile, the national currency Pakistan Rupee (PKR) continued to lose ground, hitting a record low against the US dollar. Currently, PKR is being traded at 201.19 against the dollar in the currency exchange market.

Furthermore, the absence of Turkish scrap buyers has slowed down purchases from the other global buyers as they are waiting for the next round of bookings for July shipments for clear price direction.

Domestic rebar market scenario

Domestic rebar market continued the slow momentum as demand is not up to the market expectations. Tradable prices are at PKR 200,000-203,000/t exw ($993-1,008/t). According to mills, rebar prices are supported on lower demand from end-users and reduced supply due to the production cut.

Pakistan domestic prices

Also, due to the current political instability in the country, most metropolitan and mega projects are on hold due to lack of goverment funds.

Outlook

Scrap buyers are expected to resume imported scrap bookings anytime soon amid domestic shortage. However, trade may remain impacted as the monsoon approaches.