Pakistan: Imported scrap prices drop to over two-month low post-Eid holidays

Pakistan’s steel and imported scrap market resumed this week after a pause last week owing to the Eid holidays. The market was mostly quiet in the last two weeks, amid Ramadan which resulted in limited working hours and labour shortage.

As per the latest assessment, imported scrap offers have fallen significantly to over two months low. However, mills and buyers are still holding back from booking large quantities in anticipation of a further price correction.

• Around 3,000 t of shredded have been booked at $570-575/t CFR levels in the last couple of days, down by $20/t w-o-w. Buyers’ purchase price idea now stands at $560-565/t CFR levels.
• UAE-origin HMS 1 is now available at $580-585/t CFR levels. However, no firm deal was reported.

“Buyers will either book shredded material or they may wait for further price drop because the current HMS prices are not workable,” said a prominent scrap trader.

Market overview

• PKR dips against the dollar: Pakistani rupee (PKR) maintained its losing streak against the US dollar and depreciated to 188.90. As the flow of payments transfers remains high during the holy month of Ramadan and also due to Eid, there are possibilities that remittances may dry out for about a week or so. This factor also increased dollar’s demand.
• Eid holidays slow down domestic activities: Eid festival holidays slowed down the domestic market activities as people have not yet returned to the market. Limited availability of labour at the mills and construction sites have impacted end user’s demand. Hence, most buyers are waiting for clarity in the domestic market situation before making any bookings.
• Domestic steel demand subdued: Increasing rebar and other construction material prices kept domestic demand depressed. Pakistan’s leading steel mills kept rebar prices unchanged for another week for G-60 (10-12mm) grade. However, tradable prices are at PKR 195,000-200,000/t exw ($1,038-1,065/t). People are also hesitant to make new investments in building new houses due to record high prices.

Pakistan domestic market prices

Outlook: The market situation is likely to get clear after all participants are back and some domestic activities happen. Meanwhile, buyers are waiting for a further price correction, SteelMint understands.