Pakistani mills raised finished steel prices to record levels due to severe supply chain disruptions in raw materials along with a constantly declining currency against the dollar, forcing them to announce a steep hike across finished steel products, SteelMint noted.
Agha Steel, Mughal Steel, and Faizan Steel raised their rebars offers by PKR 30,000/t ($110/t).
Fresh offers for deformed grade 60 rebar (10-12 mm) are at PKR 301,500–302,000/t exw ($1,100-1,103/t), including taxes, effective 4 February 2023. However, tradeable prices remained lower by PKR 10,000-15,000/t.
Due to unexpected non-opening of letters of credits (LCs), some major steel mills announced suspension of further sales and bookings of finished steel (rebars), which may be considered a near-term increase in steel prices.
Further, International Steel, Aisha Steel Mills, and Hadeed Pakistan also increased prices of cold-rolled coils (CRCs) and coated flat steel products by PKR 15,000/t ($54/t), effective 4 February, 2023. In January 2023, mills announced four price hikes.
Fresh offers for CRCs are around PKR 275,000-280,000/t exw ($998-1,016/t) and for GP, stands at around PKR 289,000-290,000/t exw ($1,049-1,053/t).
Domestic scrap prices up on material shortage: Fresh offers for local scrap are at PKR 190,000-200,000/t($690-726/t) exy-Punjab, up PKR 10,000/t ($/t) w-o-w.
PKR hits record low
As a consequence, the Pakistani rupee (PKR) has become the most depressed currency in the region and fears are that a crunch in dollars will further depreciate its value.
The rupee continued to weaken faster than market expectations. Currently, it is being traded at 275.8 against the dollar, registering a record low.
Imported scrap market remains silent
The imported scrap market continued to maintain silence for yet another week amid negative sentiments structured on factors like limited foreign reserves, power outages and stalled steel operations, non-opening of letters of credit, and so on.
“Small mills are closed, major mills are expected to survive by the end of February,” said a reliable source.
SteelMint’s assessment for imported shredded scrap in containers is at $450-455/t CFR, down by $5/t w-o-w.
The industry is on the brink of collapse due to a combination of factors, including shortage of raw materials. The increase in international scrap prices and successive depreciation of the PKR has been seen since the last 18 months or more.
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