Pakistan’s imported scrap market rebounded this week as buyers actively secured cargoes to replenish low inventories. Additionally, domestic scrap supply tightness also kept mills active in booking imported scrap cargoes.
Recent deals and offers
- Around 2,000 t of imported shredded scrap from UK/Europe in containers has been booked at $520-525/t CFR Qasim.
- A few more deals were concluded for around 1,000-1,500 t of shredded material at $515-518/t CFR Qasim.
Factors driving scrap and steel markets:
- Rupee hits fresh low against dollar: Devaluation of the national currency continued, with the PKR hitting an all-time low against the US dollar. The PKR is being traded at 201.65 against the US dollar.
- Domestic scrap prices increase- Local scrap prices have strengthened further due to scrap shortage in the domestic market. Prices have risen up by around PKR 5,000/t w-o-w. Domestic scrap (equivalent to shredded) is now available at PKR 130,000-133,000/t exy ($/t) levels. This has created panic among the market participants.
- Major mills raise rebar offers by up to PKR 8,000/t ($40/t): Major steel mills in Pakistan such as Mughal Steel, Agha Steel and Faizan Steel have hiked rebar offers by PKR 7,500-8,000/t ($38-40/t). The prices have increased for the first time after a gap of over two months from end-Mar’22, sources confirmed. Offers for G-60 rebar (10-12mm) are at PKR 222,000-224,000/t exw Punjab ($1,113-1,123/t) including taxes. The tradeable prices improved to PKR 213,000-215,000/t exw ($1,068-1,078/t).The hike was triggered due to rising input costs due to currency depreciation, increasing power tariffs and supply chain disruptions. Additionally, semi-finished steel producers have also increased their local bala and billet prices.
Pakistan domestic prices
Outlook: Market participants are waiting for the budget, expected to be placed on 10 June 2022, hoping for market stability and reforms.
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