Pakistan’s imported ferrous scrap index sharply fell by $17/tonne (t) w-o-w amid weaker interest amid higher offers from both the UK, which were around $415-422/t, and the UAE ($425-430/t).
According to a mill source, shredded scrap offers have generally ranged from $415-420/t, regardless of origin, with some distress sales noted. Fresh offers have softened by $5-8/t over the past week as customers seek to average prices and restock.
From supplier side sentiment, containerised demand remained dull in Asian countries with customers buying on as-needed basis.
According to a trader, slowing down of inquiries have significantly reduced fresh trades entering the country, largely due to heavy rains and continued weak trend in rebar sales.
BigMint’s assessment of Europe-origin shredded stood at $410/t, down $17/t w-o-w.
Domestic market: Billet and rebar prices have declined after a slight recovery last week and now stand at PKR 213,000-214,000/t and PKR 252,000-253,000/t exw respectively. Domestic scrap is priced at PKR 150,000-152,000/t exy, down PKR 2,500-3,000/t. Rebar prices remain under pressure due to limited sales and slow recoveries. Commercial quality billets are also facing pressure, with scrap prices dropping to levels where billet producers struggle to cover production costs.
The spread between rebar and domestic scrap prices in Pakistan has reached over PKR 100,000/t driven by rising operational costs, which is further complicating raw material purchasing decisions.
As per a mill source, depending on payment terms, rebar grade 60 is priced at PKR 248,000-250,000/t for cash and PKR 252,000-255,000/t for credit. Rebar sales are very low, with workable prices as low as PKR 240,000-242,000/t ex-factory.
Recent reports revealed a PKR 9.7 billion money laundering scandal in Pakistan’s iron and steel sector, involving nine importers who manipulated their manufacturing status to evade PKR 315 million in taxes and illegally transfer funds abroad. The Post Clearance Audit (PCA) South uncovered the scam during a sector-based audit, revealing that these importers falsely claimed tax exemptions and reduced duty rates intended for manufacturers while engaging in commercial sales without manufacturing facilities or business premises.
Audit notices sent to these companies were returned as undeliverable, with the addresses proving untraceable. Further investigations have shown that these companies had minimal financial worth and some had not filed income tax returns despite financing large-scale imports. PCA teams are now intensively investigating to identify those responsible for the fraud.
Outlook
The imported scrap price outlook for Pakistan remains uncertain, with declining trends potentially deterring suppliers due to reduced cost-effectiveness, rising freight costs, and container shortages. Buyers, however, are still anticipating prices at around $400/t by next week.
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