Pakistan’s imported scrap prices have neared almost two-month highs but buyers are active in the market. The trade scenario has improved on the back of increased scrap prices and subsequent bulk cargo bookings from Turkiye. The low material availability in domestic and overseas markets remained the major reason for the sudden price hike.
Meanwhile, steelmakers have shown some interest in booking small lots of containerized material, alarmed by the scarcity.
- Offers for UK/Europe-origin shredded scrap in containers stand at $445-450/t CFR, unchanged w-o-w. However, buyers are still bidding at $440/t CFR levels.
- Around 1,300 t of UK-origin shredded was booked at $440-445/t CFR basis.
“The market is mostly stagnant due to low demand from end-users, yet mills have kept their production levels low,” said a prominent scrap dealer.
“The country’s economy is disturbed due to an unstable political situation, and is struggling to come out of this crisis,” said a prominent scrap buyer.
Domestic market recovers
- PKR remains firm: The national currency, Pakistani rupee (PKR), has remained stable over the last four weeks. The currency is being traded at 224.8 against the dollar.
- Rebar prices recover: Domestic rebar trade prices improved slightly after the increase seen in domestic scrap prices due to its scarce availability. However, offers for G60 rebars are at PKR 200,000-205,000/t exw-Punjab ($890-913/t). On the other hand, demand for steel is still weak.
“Domestic prices have improved due to the scrap shortage,” a market insider said.
- Local scrap prices further up: Domestic scrap prices continued to move up due to lack of material availability. Fresh offers for local scrap are at PKR 133,000- 135,000/t exy-Punjab (equivalent to shredded) levels. Prices are likely to rise further as a result of active buying.
Pakistan domestic prices
Market updates
- PSQCA stops illegal steel manufacturing: The Pakistan Standards & Quality Control Authority (PSQCA) has stopped the manufacturing of seven illegal and unlicensed steel mills, seizing huge quantities of deformed steel bars and other products and has taken action against 22 steel mills.
- Auto sales plunge 39% in 5MFY23: Automobile sales plunged 39% y-o-y in the first five months of the current fiscal year, with a total of 66,458 units being sold in 5MFY23 compared to 108,635 units in the corresponding period last year. Despite a 36% m-o-m improvement in demand for cars, jeeps, and pick-ups in November, total auto sales stood at 18,391 units in November, as compared to 13,502 units in October.
Outlook
Pakistan’s buyers are active in booking imported scrap due to its shortage in the local market and consistently increasing prices. However, domestic finished steel demand is likely to remain slow in the short term.
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