Pakistan: Imported ferrous scrap prices rise $14/t w-o-w on freight risks and aggressive mill buying

• Pakistan emerges as strongest container scrap buyer in South Asia
• Freight, Middle East tensions lift import offers

Pakistan’s imported ferrous scrap market strengthened during the week ended 28 July, driven by higher freight costs, renewed geopolitical tensions in the Middle East and proactive mill restocking. While weak finished steel demand and monsoon-related disruptions continued to weigh on steel consumption, buyers accelerated imports to secure cargoes ahead of further increases in replacement costs.

BigMint’s assessment for Europe/UK-origin shredded scrap rose by $14/t w-o-w to $419/t CFR Port Qasim.

The rally was primarily supply-led. Fresh geopolitical tensions around the Strait of Hormuz pushed up freight rates and war-risk premiums, while seasonal declines in European scrap generation and firm Turkish deep-sea scrap prices strengthened exporters’ pricing power.

UK/Europe-origin shredded scrap offers increased to $415-420/t CFR Port Qasim, with deals concluded at $405-416/t CFR, depending on cargo quality. Premium UK-origin material was reported above $422/t CFR.

A UAE-based trader said, “India’s scrap market is dead, Bangladesh is also not buying–only Pakistan is actively booking cargoes.” Muted demand from India and Bangladesh has redirected containerised scrap cargoes towards Pakistan, making it one of the strongest buying markets in Asia.

Mills stepped up procurement to secure cargoes before replacement costs increased further, while growing familiarity with the country’s revised import documentation and tax procedures encouraged importers to gradually return to the market.

In contrast, higher-priced Asian-origin material remained largely uncompetitive. Malaysia-origin shredded scrap was offered at $425-430/t CFR, busheling at $430-435/t CFR, and PNS at around $425/t CFR, while buyers maintained bids at $390-395/t CFR, resulting in limited transactions.

Trades during 22-28 July

• UK-origin shredded: 3,000 t booked at $405-406/t CFR Port Qasim
• UK-origin shredded: 4,000-4,500 t booked at $408-410/t CFR Port Qasim
• UK-origin shredded: 2,000 t booked at $415-416/t CFR Port Qasim
• UK-origin shredded: 500 t booked at $420/t CFR Port Qasim

Domestic market

Domestic steel prices continued to strengthen during the week, supported by higher scrap costs. Local scrap prices increased to PKR 152,000-155,000/t ($547-558/t), while CC billet was heard at PKR 210,000-213,000/t ($756-767/t) and Bala billet at PKR 202,000-204,000/t ($727-734/t). Rebar prices also firmed to PKR 243,000-245,000/t ($875-882/t).

Despite firmer scrap and steel prices, overall market activity remained subdued, with company sales estimated at around 40% and mills operating at approximately 40-45% capacity utilisation, reflecting weak construction demand and monsoon-related disruptions.

Outlook

BigMint expects Pakistan’s imported scrap market to remain firm in the coming week as elevated freight rates, geopolitical uncertainty in the Middle East, and continued mill restocking support import offers. However, weak finished steel demand, seasonal monsoon conditions, and cautious procurement are expected to limit further price gains, with buyers likely to focus on prompt cargoes and immediate requirements.