Scrap import enquiries in Pakistan have gained slight momentum on lower inventories. However, the decline in steel prices is weighing on sentiments. SteelMint heard a few bulk scrap offers for shredded at around $450/t CFR for UK-origin material. Some sources indicated a deal to be under negotiation; however, it could not be confirmed till the time of publishing this assessment.
- Fresh offers for UK-origin shredded scrap in containers are at $455-460/tonne (t) CFR, unchanged w-o-w.
“Market sentiments are still negative, domestic rebar sales are yet to improve,” said a steelmaker source.
The Karachi steel market saw some improvement in enquiries. However, scrap bookings are yet to pick up. Meanwhile, the country’s steel market is still depressed even after the recent cut in rebar prices by the major mills.
Factors driving market
- PKR continues to rise against USD: The Pakistani rupee (PKR) continued to move up against the US dollar for yet another week. The PKR is now trading at 217.3 against the dollar, up PKR 8 w-o-w.
- Neighbours supporting the market: Other prominent scrap-buying countries like India only supported the import market as despite high offers buyers continued with their bookings. On the other hand, Bangladeshi buyers booked bulk cargoes despite the absence of a major scrap driver, Turkiye. Hence suppliers are less interested in quoted offers to Pakistani mills as they are getting better offers from India.
- Liquidity issue: With the continued downtrend in rebar prices despite limited transactions in the domestic market, mills are struggling to manage cash flow. Many construction projects are also on hold due to liquidity crunch.
- Amreli Steel resumes production: Amreli Steels, one of Pakistan’s leading steel producers, has resumed production which had remained suspended from 19 September onwards owing to sluggish demand for finished steel products due to heavy rainfall and floods.
- Mills slash rebar offers by PKR 8,000/t: Amreli Steels has lowered rebar offers by PKR 8,000/t ($37/t). Current offers for G-60 (10-12 mm) are at PKR 225,000/t exw Punjab ($1,033/t) and PKR 223,000/t for rebar of size 16mm and above, including taxes, effective from 10 October. However, tradable prices remain at PKR 5,000-6,000/t — lower than the offered price, depending on payment terms.
Pakistan domestic prices
Prices have been reduced due to low finished steel demand amid floods and currency devaluation, followed by an increase in energy and input costs.
Outlook: The imported scrap market is likely to improve from mid-November onwards, as the current market situation remains negative and buyers are still trying to recover from the recent floods, SteelMint learnt from sources.
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