- Domestic prices near bottom with slight PKR recovery
- Winter slowdown to deepen, mills planning lower operations
At the start of the current week, European/UK-origin shredded scrap was assessed at $355/t CFR Qasim, setting a steady tone for the import market.
However, the imported scrap levels for Pakistan are hovering around a five-year low level — last seen during November 2020.
From the UAE, HMS continued to trade around $335-340/t CFR, while shredded offers softened to $360-362/t CFR amid two weeks of pressure, with Middle East suppliers also lowering levels.
As per a major mill-side source, buying interest remains weak, with mill operations currently running at 35-40% and expected to dip further as winter approaches. At the start of the week, European/UK shredded was assessed at $355/t CFR Qasim, while we concluded 2,000 t of UAE shredded at $360/t CFR Qasim.
Raw material procurement is likely to stay more diversified toward domestic scrap, with expectations of a near-term rebound in local prices after recent overcorrections.
A major scrap trader shared that there has been no trade since last Thursday from our-end. Current offers are around $358-360/t CFR Qasim, while buyers are only showing interest at $352-354/t, and even that is from very limited participants. Some suppliers who already have cargo on the water and are nearing arrival are willing to sell at $350-352/t just to close deals.
On the domestic front, local scrap has stabilised after consecutive declines and is now expected to recover following sharp over-corrections. Local scrap is currently at PKR 130,000-131,000/t ($461-464/t). Rebar prices dropped PKR 2,000-3,000/t ($7-11/t) w-o-w, bringing current levels to PKR 216,000-218,000/t ($766-773/t). Bala stands at PKR 175,000-178,000/t ($620-631/t), while billet is assessed at PKR 184,000-186,000/t ($652-659/t). Mill operations remain extremely low, with plants running at bare-minimum levels just to cover essential costs.
Gadani processed just 1,444 LDT this week, sharply down from 8,522 LDT, as recyclers remained cautious and no firm offers surfaced. The first domestic yard is nearing HKC approval, with more expected within 306 months, offering some long-term optimism.
Local plate prices fell $11/t to $586/t, while the PKR saw a mild uptick. Weak fundamentals, cheaper Iranian inflows, and a third straight week without vessel arrivals kept sentiment subdued, aside from a single distressed vessel at the yard. In the long term, Maersk’s $2bn investment in Gadani is viewed as a major strategic boost to Pakistan’s maritime and trade infrastructure.
Outlook
As per a market insider, mills are monitoring demand trends and currency movements before taking any major positions. With winter holidays approaching, Western suppliers are likely to raise offers by up to $10/t, with shipments expected to roll out between mid- and late January.
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