Pakistan: Imported scrap prices fall by $35 w-o-w, trades slow down as buyers turn cautious

• Imported scrap buyers turn cautious and stay away from the market
• Pakistan’s scrap imports up by 16% in CY’20
• Domestic rebar prices drop slightly to sustain cash flow

A downturn in imported scrap prices has started since last week. Market sentiments have turned bearish as this comes after a continuous price rise in last 16 weeks. Most of the market players kept themselves away anticipating a further fall in prices. Major buyers in Karachi region have already booked sufficient scrap earlier, as finished market remained comparatively supportive in Karachi region, SteelMint learnt from its channelled sources.

High seas offer for shredded is being quoted at $458-460/t CFR level, while yards are not offering at the moment. “Buyers are cautious at the moment and are thinking that offers would fall further in the coming days. Hardly 2,000 t of scrap might have been booked. In addition to it, nearly 5,000-6,000 t of confirmed trades has been reported last week at $470-480/t CFR Qasim basis, for UK origin shredded”, shared a Pakistan based major trader.

“There is chatter that traders have around 15,000-20,000 t of scrap at less prices, so they are pushing at such low-level prices but once these quantities sold, prices will bounce back as yards are still tight in supply”, highlighted a prominent steelmaker of Pakistan.

However the yard owners have not lowered their offers yet.“There are rumours but yards are still not offering at $455-460/t CFR levels, if any it is just trader’s activity. We haven’t sold anything lately” a global scrap trader shared with SteelMint.

SteelMint’s assessment for the UK/EU origin now stands at $460/t CFR levels, decreasing by $13 against the closing of the last week, while registering a sharp drop of $35 w-o-w.

Pakistan’s ferrous scrap imports up in CY’20– Pakistan’s ferrous scrap imports witnessed a sequential growth of 16% y-o-y to 4.57 mn t in CY’20, as compared to 3.94 mn t in CY’19, according to customs data maintained with SteelMint. The continuous development in the construction and infrastructure sector in Pakistan boosted the ferrous scrap imports.

Domestic rebar offers decline– Following the global scrap prices domestic steel market rates trend turned downward as compared to last week. Additionally, the last ten days of every month is electricity billing period and domestic prices have come down to sustain the cash flow during this period.

Deformed Grade-60 offers from major market players are being quoted at a higher level of PKR 140,000-141,000/t exw levels. Whereas, currently, the average workable rate is around PKR 134,000/t exw level, according to SteelMint assessment.