Pakistan: Imported scrap prices fall to 16-month low in recent deals

Pakistan’s imported scrap trade maintained its slow pace with the global market collapsing since last week.

Meanwhile, following the global price downtrend, imported scrap prices to Pakistan fell to 16th-month lows. However, the absence of Turkish scrap buyers, the high currency exchange rate, and increased electricity tariffs slowed down trade activities.

• Fresh offers for imported UK-origin shredded material in containers is now at $435-440/t CFR levels.
• Around 6,000 t of UK-origin shredded were booked at these price levels yesterday.

In contrast, Pakistan’s mills are showing increased demand for bulk scrap cargoes after a drop in bulk freight rates and global offers, as per sources. Bulk shredded scrap of UK/Europe-origin stood at $440/t CFR, down significantly by $40/t last week.

Earlier last week, a bulk cargo comprising 35,000 t of shredded material was booked at $475-480/t CFR Qasim basis.

Additionally, the scrap shortage in Pakistan’s domestic market kept buyers active in buying imported material. Buyers looked for small parcels of UAE-origin material for prompt shipments, SteelMint learnt.

Market overview

• PKR hits new record low: The national currency, the Pakistani rupee (PKR) continued to set new records as it dipped to 212 against the dollar in the currency exchange market.
• Ferrous scrap imports plunge 40% m-o-m in May: Pakistan’s ferrous scrap imports were at 160,000 t in May 2022 as against 270,000 t a month ago, as per SteelMint data. Seaborne bookings for May fell by a significant 41% m-o-m. Similarly, on a yearly basis, scrap imports fell compared to 270,000 t in May 2021.
• Major mills raise rebar offers further by up to PKR 5,000/t ($23/t): Major steel producers Agha Steel, Amreli Steel, and Moiz Steel have further increased rebar offers by PKR 5,000/t ($23/t) compared to 14 June 2022, sources confirmed. Offers for G-60 rebar (10-12mm) are at PKR 236,000/t exw Punjab ($1,122/t), including taxes. Rebar prices have increased due to the sharp hike in electricity tariffs, distribution costs, and a high currency exchange rate.

Outlook: Market participants believe, as the monsoon approaches, demand from steel mills in booking fresh slots is usually less. Hence, the market is waiting for the next round of bookings from the Turkish scrap buyers.