Pakistan: Imported ferrous scrap prices up by $30/t w-o-w on tighter supplies

Pakistan’s imported ferrous scrap prices have continued to move north amidst higher offers from suppliers for prompt cargoes given the lower seasonal collection rates, upcoming Eid holidays and tight scrap availability in the UAE. Pakistan-based mills remained more active compared to other South Asian countries in terms of restocking scrap.

• Fresh offers for UK-origin shredded in containers are at $470-475/t CFR levels, moving up considerably by $30-35/t CFR levels.
• Around 2,000 t of shredded were heard to have been booked at $470/t CFR basis.
• Before this, around 3,000 t of UK-origin shredded goods were traded at $460-465/t, CFR Qasim.

Market movers

• PKR devalues against dollar: The Pakistani rupee (PKR) lost value last week but has further eroded and is trading at 206.2 against the dollar after hovering at 205.74 last week.
• Mills active in pre-Eid scrap bookings: The upcoming Eid holidays are likely to keep the market mostly quiet, owing to limited demand from end-users due to unavailability of labour. Additionally, heavy rainfall, mostly in the northern part of the country, will slow down market activities.
• Limited offers from UAE on tight availability: Pakistan’s alternate material sources like Dubai will possibly remain less active during the Eid holidays. The limited availability of scrap due to lower working hours and scrap collection kept suppliers active in their domestic market. New offers for Dubai-origin HMS 1 are at $515-520/t CFR Pakistan levels.
• Monsoons weigh down rebar prices: Major steel producers kept their rebar offers unchanged for yet another week. Offers for G-60 rebar (10-12mm) are at PKR 236,000/t exw Punjab ($1,122/t), including taxes. However, the tradable value is lower by PKR 8,000-10,000/t exw, depending on payment terms. Furthermore, mills are under pressure to lower the rebar prices, due to less demand ahead of the Eid holidays apart from the monsoon which will keep construction steel demand subdued.

Outlook: Market participants believe that rebar offers may correct slightly after the Eid holidays, due to the monsoon, hence people are waiting for a clear picture to emerge.