Pakistan, a leading South Asian ferrous scrap importer, has recorded a decline in its yearly ferrous scrap imports by 6% in Jan-Aug’21.
The country’s scrap imports stood at 2.57 million tonnes (mn t) in Jan-Aug’21 against 2.73 mn t in the same period last year, as per data maintained with SteelMint.
However, on a m-o-m basis, import volumes increased by 20% to 0.30 mn t in Aug’21 as against 0.25 mn t in Jul’21 owing to shortage of domestic scrap and hike in ship-breaking prices.
Key reasons for decrease in import volumes
- Scarcity of material and high freight charges in the exporting countries of UK, Europe, China and others negatively impacted import volumes of ferrous scrap.
- The hike in imported scrap prices following the global uptrend during the year-end period kept most of the mills on the sidelines and preference was given to billets instead of scrap.
- One of the major reasons for the lower volumes was the UK which announced a national lockdown at the beginning of this year, prompting a range of reactions from across the world. The lockdown lasted till mid-February.
Domestic rebar prices climb up: Pakistan’s Deformed Grade-60 prices further increased by around PKR 40,000/t from PKR 131000/t in Jan’21 to PKR 171000/t in Aug’21. The major reason for this sudden hike was the resumption in construction activities which started after mid-March as January-February is traditionally slow in terms of steel consumption.
Outlook
Pakistan’s imported scrap market may see a hike in volumes in the coming months due to inventory shortage. Furthermore, steelmakers expect rebar prices to decrease owing to slow demand in the domestic market, mostly from end-consumers. However, rainy weather in the northern region may put buyers in “wait-and-watch” mode.
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