Pakistan’s imported scrap trade improved slightly since the last week-end with a few deals concluded. Prices decreased slightly in recent deals. However, mini-mills are expecting a further price correction.
“Around 4,000-5,000 t of imported shredded scrap in containers was booked in the last two days from the US/UK at $549-553/tonne (t) CFR Qasim levels,” said a prominent scrap trader.
- Fresh offers for UK/EU-origin shredded are at $550-555/t CFR, down $5/t w-o-w.
- UAE-origin HMS1 is being offered at $505-510/t CFR Qasim levels.
Market insiders pointed out various factors that kept buyers active in the imported scrap market (including increasing steel scrap prices, freight charges, etc.) –
- Turkey’s imported scrap prices fall further: Turkish mills booked two bulk cargoes of Baltic and European origins at lower prices. Buyers remained active as they need a few more bookings for Jan’22 shipments. A Baltic-origin cargo containing HMS 1&2 (80:20) was booked at $475/t CFR Turkey, down by $7/t d-o-d.
- Pakistan’s imported scrap prices inch down: Steel mills have now resumed bookings to restock the material. Buyers refrained booking fresh slots, owing to unstable exchange rate of the curency (Pakistani rupee). Hence, steelmakers are waiting for a clear price direction. Last week, around 5,000 t of UK/EU-origin shredded was sold at $555/t CFR Qasim basis.
The local market is quite at present and negative sentiments have put steelmakers under pressure. Local scrap prices declined significantly to PKR 125,000-126,000/t exy basis.
- PKR losses again against dollar: The Pakistani rupee (PKR) has maintained the downtrend for the past six months. The exchange value slashed further to 176.6 levels against the dollar as compared to 175.13 recorded a week ago.
- Pakistan mills face liquidity issue: Major steel mills are in trouble due to cash liquidity issue in the market seen in the last few weeks. The frequent changes in taxes kept steel mills confused and empty-handed to trade further in the imported scrap market at increasing offers.
Major mills lift rebar offers : Major steel mills in Pakistan like Amreli, Agha Steel, Faizaan Steel lifted rebar offers by PKR 2,000-3,000/t ($11-16/t) today, SteelMint learnt from sources. Rebar offers escalated amid a hike in input costs for steelmaking, increasing energy costs, along with the continuous devaluation of the currency.
Revised offers for 10-12 mm rebar stand at PKR 197,000-198,000/t exw ($1,115-1,121/t), exw-Punjab including taxes while deals were happening at PKR 189,000-192,000/t exw ($1,068-1,085/t) basis.
Pakistan domestic price
Source: SteelMint Research
However, the steel consumption remained slow due to smog in winters. Most of the government’s mega-projects and metropolitan construction projects are on hold or moving slowly due to a lack of government funds.
Outlook
The imported scrap market is likely to remain active in the near term on restocking demand ahead of the winter holidays.
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