- Long steel demand remains weak, mills facing financial stress
- Recovery unlikely before CY’26 without stronger govt spending
In Pakistan’s imported scrap market, EU-origin shredded held stable at $355-358/t, with workable levels near $350/t, while UAE-origin HMS 80:20 was assessed at $338-340/t. Market sentiment showed a slight improvement as the European winter slowdown tightened scrap availability.
Around 5,000-7,000 t of EU-origin shredded was booked at $348-355/t CFR Qasim over the past six to seven days.
Domestic steel market
Pakistan’s major rebar producers reduced prices to PKR 220,000-222,000/t ($784-791/t) exw, down from PKR 228,000-230,000/t ($813-820/t) last month. The long steel segment has remained under pressure through CY’25, weighed down by weak demand, financial stress, cost-rationalisation measures, and intermittent mill shutdowns.
Producers are turning cautiously optimistic as expectations of higher infrastructure spending, reconstruction-led demand recovery, stronger enforcement against tax evasion, and tighter controls on steel smuggling from Iran help stabilise the outlook.
A steadier currency is also seen supporting sentiment into early CY’26. Saudi Arabia’s extension of its $3 billion deposit with the SBP, along with the IMF’s ongoing review and the likely release of a $1.2 billion tranche, is expected to reinforce Pakistan’s dollar reserves and help maintain a stable FX rate.
The market remains highly selective, with margins tightening as raw material and finished steel prices narrow.
Domestic scrap is at PKR 128,000-130,000/t ($456-463/t), billet at PKR 185,000-188,000/t ($660-670/t), and bala at PKR 175,000-178,000/t ($624-635/t).
With the scrap-to-rebar spread tightening, buyers remain cautious and are purchasing strictly on a requirement basis. Scrap offers remain high, but the domestic market is moving slowly, weighed down by liquidity constraints and limited cash flow.
Ship-recycling market: Gadani activity has slowed sharply, with the anchorage idle for nearly a month as vessel availability stays tight and steel plate prices soften to $575/t. Prime Green Recyclers has become the first HKC-approved yard in Gadani, a key step forward, but broader compliance remains limited. More HKC approvals are expected in Q1 2026, while several Bangladesh yards are also close to completing upgrades and entering the certified market.
Outlook: The market is expected to stay soft, with buyers limiting purchases to essentials. Scrap may remain firm on tight supply, while finished steel stays under pressure. Any improvement hinges on government spending and currency stability, keeping demand recovery unlikely before early CY’26.
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