Pakistan’s imported ferrous scrap prices remained range-bound w-o-w as workable levels for the UK-origin shredded scrap stood at $422-425/t. Despite largely stable prices, the market faced challenges due to increased costs of raw materials, higher taxes and lack of demand.
A market insider noted, “I think the market will rise next week in Pakistan, and Turkiye is also back in the market. However, the market is moving extremely slowly, with nominal deals, and liquidity issues continue to dampen trade flow.”
A few offers were heard from the UAE for shredded scrap at $428/t for 0-7 days shipment and HMS mixed scrap was offered at $405-408/t CFR Qasim.
Imported ferrous scrap offers are currently at $425-428/t from the UK.
Around 4,000-4,500 t of shredded scrap from the UK and Europe were booked at $422-425/t CFR Qasim in the last seven days.
BigMint’s assessment for Europe-origin shredded stood at $422/t, down by $1/t w-o-w.
Domestic market: Major steelmakers like Amreli Steel, Naveena, Siraj, and Mughal Steel in Pakistan have increased their rebar offers by PKR 5,000-8,000/t effective from 1 July 2024 because of increased cost and increased burden of tax, although there is no demand. The market is going through tough conditions with production going around 30-40%.
In domestic scrap prices, there is a rise of up to PKR 10,000-11,000/t and hovered around PKR 160,000-162,000/t. Similarly in billet the new offers were heard at PKR 220,000-222,000/t exw.
The International Monetary Fund (IMF) has opposed Prime Minister Shehbaz Sharif’s PKR 200 billion package to reduce power tariffs for industrial consumers, calling it a hidden subsidy that shifts the financial burden to residential consumers. Buyers remained cautious, anticipating demand fluctuations as the government reviewed steel mills and aligned investments with IMF recommendations.
The Pakistani government has recently decided to close Pakistan Steel Mills (PSM) due to insufficient natural gas supplies for basic maintenance. The PSM lands will be transferred to the Sindh provincial government for general industrial use, with plans to establish a new steel plant in collaboration with the provincial government.
Outlook: Imported ferrous scrap prices are expected to increase as the supplier side continues to offer high due to the low collection rate in their domestic market, followed by dampened steel demand with workable prices for rebar and billet expected to drop from offers by PKR 4,000-5,000/t.
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