Imported shredded scrap offers have seen a slight dip this week, influenced by a sluggish domestic steel market and a selective approach to purchasing imported scrap based on immediate needs. The current offers for containerised shredded scrap hovered around $435-440/t CFR Qasim, reflecting a slight adjustment from the $435-445/t CFR observed one week ago.
Approximately around 3,000 t of shredded scraps had been booked from Europe during the week in the range of $428-440/t CFR Qasim.
A representative from a steel mill mentioned, “The sales of rebar are slow, with some steel mills offering below the prevailing market rates. The decline in sales can be attributed to the seasonal lull during winter, and additionally, the approaching elections have led to hesitancy in making bulk bookings.”
A representative from a trading company commented, “Currently, we do not have any new offers. We are awaiting stability in terms of Red Sea freight surcharges. We want to avoid a situation where additional surcharges are introduced after a transaction, leading to a negative margin.”
A statement from a steel mill official noted, “Deals for around 10,000 t from the UK and Europe closed at $438-440/t CFR Qasim last week. Today, we received an offer of $445/t CFR. However, buying interest remains sluggish.”
Domestic market: In the local market, reports indicated that local scrap prices are ranging from PKR 160,000 to 170,000/t ex-Punjab. Meanwhile, rebars are observed at PKR 260,000- 262,000/t. However, there are indications that certain steel mills are engaging in underselling strategies to stimulate sales.
As for cc-billet, prices are evaluated at PKR 225,000 to 230,000/t ex.
An official from a steel mill commented, “The domestic market is currently experiencing a slowdown, with demand for rebars being notably sluggish.”
Exchange rate: The current exchange rate stands at PKR 279.75 against USD. Notably, last week same day it was around 280.23.
Outlook: Imported scrap offers are poised to remain steady within a the range, while buying activities are expected to be driven by specific needs. This is in light of the subdued sales of rebars, with the market showing a cautious approach leading up to the national elections on 8 February.