- Mills operating at low capacity, weak demand weighs on sentiment
- UAE shredded scrap prices remain firm due to short transit time
Imported shredded scrap from Europe to Pakistan was offered at $376-380/tonne (t) CFR Qasim, as per sources. Trade inquiries continued to remain below $370-372/t levels. In the current market, tradable levels for suppliers still remain near $374-376/t even though some higher level deals were heard from the market. Meanwhile, shredded material from the UAE continues to flow steadily into Pakistan due to its short four-five day transit time, helping maintain regular supply despite weak overall demand.
BigMint‘s assessment for European/UK-origin shredded scrap stood at $374/t CFR Qasim, an increase of $6/t w-o-w.
Market insiders say this week is critical as conditions have stabilised. Mills continued to operate at low capacity amid continued slow finished steel demand, and lower margins for billets and rebars in the backdrop of the recent geopolitical tensions. This led to limited deals as a persistent bid-offer gap and bearish sentiment dampened market activity.
As per a Karachi-based steel mill source, “Rebar is at PKR 235,000-240,000/t exw ($835-853/t), billet at PKR 200,000-205,000/t ($711-729/t), and local scrap at PKR 138,000-140,000/t ($490-498/t). Imported shredded offers from Europe are hovering at $376-380/t, though most buyers are only willing to pay up to $375/t.”
Domestic scrap prices were at PKR 136,000-140,000/t ($481-505/t), billets at PKR 200,000-204,000/t ($711-727/t), and rebars at PKR 236,000-240,000/t ($837-861/t), with slow construction activity and stalled government projects negatively impacting market sentiment.
A UK-based supplier commented: “Offers for UK-origin shredded are around $375/t CFR Qasim, though $380-385/t levels may no longer be viable. The last confirmed deal was done at $372/t for 1,000 t. Meanwhile, UAE shredded is offered at $390-395/t CFR, adding pressure on UK-origin material.”
A UAE-based trader said: “Shredded steel scrap from Dubai is actively flowing to Pakistan due to the short four-five day transit time. Offers were made at $394/t CFR Qasim yesterday (12 May) and $388/t today, but buyers remain cautious and the material is still unsold.”
Outlook
Market sentiments in Pakistan remain cautious amid sluggish demand for steel, with mills burdened by high inventories and ongoing losses. In the raw material market, wide bid-offer gaps in imported scrap continue to hinder purchases. While buyers remain hesitant, a few deals may conclude as signs of gradual improvement emerge.
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