- Mills operating at 30% of their capacity amid weak steel sales
- Buyers limit bookings amid high inventories, bid-offer gaps
Pakistan’s imported shredded scrap market remained subdued during the week ended 18 August, with buyers resisting higher supplier offers amid weak steel demand, heavy monsoon rainfall, and sufficient mill inventories following sizeable purchases in July and recent weeks. European and UK supply declined, while material from the US, Canada, South Korea and Malaysia became more readily available. EU/UK shredded scrap offers were heard at $415-420/t CFR Port Qasim, while workable bids were around $410-412/t CFR. Market activity was further hampered by a newly introduced energy-linked sales tax, Karachi port congestion and strikes, and a public holiday.
BigMint assessed shredded scrap at around $415/t CFR Port Qasim, up $2/t w-o-w. Around 4,000-5,000 t of European shredded scrap was booked at $412-415/t CFR Port Qasim, indicating limited room for further price declines despite subdued mill buying.
“Heavy rains have slowed the market significantly. We are currently operating at around 30% capacity, while steel sales are only around 40% of normal levels. Shredded scrap offers are at $417-420/t CFR Port Qasim, with workable levels around $412-415/t CFR. We have not seen any major trades as buyers remain cautious,” said a Peshawar-based mill source.
Domestic market
Local scrap prices were reported at around PKR 142,000-145,000/t ($512-522/t), while billet was indicated at PKR 215,000-220,000/t ($775-793/t) and rebar at PKR 235,000-240,000/t ($847-865/t). Domestic scrap availability remained affected by persistent rainfall, while weak downstream demand kept market activity subdued.
“Continuous rainfall, particularly in Punjab, has disrupted scrap collection, transportation, and construction activity. Local scrap is trading at PKR 142,000-144,000/t ($512-519/t), while billet is at PKR 215,000-218,000/t ($775-785/t) and rebar at PKR 235,000-238,000/t ($847-858/t). We are operating at reduced rates and taking a wait-and-watch approach after securing substantial volumes in recent weeks,” said a Karachi-based mill source.
The revised sales tax mechanism has also disrupted domestic scrap procurement, with higher tax costs discouraging yards from supplying material to mills. The policy has effectively favoured mills using a higher proportion of imported scrap, while those dependent on local scrap have taken a more cautious approach. Karachi Port congestion and strikes further complicated material movement and deliveries.
Outlook
Pakistan’s imported scrap market is expected to remain largely stable in the coming week with weak rebar demand, high mill inventories, and monsoon-related disruptions limiting fresh bookings. However, reduced domestic scrap availability and elevated freight/replacement costs should provide a floor to prices. With offers at $418-420/t CFR Port Qasim, buyers are likely to target $412-415/t CFR for workable deals.
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