Pakistan: Imported scrap trades continue despite weaker steel market sentiments

Global imported scrap market has softened further this week. Imported scrap prices to Pakistan saw a slight fluctuation in last few days. Deals in small quantities continued to happen. However, buyers are waiting for prices to come down further.

“In last one week, around 30,000 t of shredded in containers from UK, US, Europe, and New Zealand has been booked at $430-445/t CFR Qasim basis. Container freight rates are still high and are less likely to come down before March” highlighted a Pakistan-based prominent trader.

SteelMint’s assessment for the UK/EU origin now stands at $435/t CFR levels, registering a sharp fall of $30 against the beginning of last week.

“Imported shredded scrap offers had bottomed to $425/t CFR with traders cutting losses. However, offers firmed back to $435-440/t for shredded with stable supply and demand” reported a prominent steelmaker.

• Around 2,000 t of UK/EU origin shredded have been booked at $435/t CFR Qasim level towards the closing of the week.
• Fresh offers for Dubai origin HMS 1&2 (80:20) are being quoted at around $390-400/t CFR level. However, few deals were reported at $385/t CFR last week.

Domestic rebar offers drop further– There is an uncertainty in the steel markets regarding variations in prices. Domestic market found solace in local growing demand as domestic construction gained some traction, SteelMint learnt.

Deformed Grade-60 offers from major market players are being quoted at a higher level of PKR 134,000-138,000/t exw levels. Currently, the average workable rate is around PKR 131,000/t exw level. According to SteelMint assessment, prices dropped slightly by PKR 3000/t w-o-w.

Outlook – Imported scrap prices in Turkey have dropped further by $20/t in a deal concluded recently. A Turkey-based steelmaker has booked around 23,000 t of UK origin bulk cargo. The cargo comprises of HMS 1&2 (80:20) at $408/t and shredded at $419/t, CFR basis. The cargo shipment would be in late February-early Mar’21. Few trade sources highlighted that this may result in lowering of bids by Pakistani mills by $10-15 over current offers.