- Local scrap strengthens, mills still run below capacity
- EU supply tightens lifting Pakistan shredded scrap prices
Imported shredded scrap offers into Pakistan climbed sharply by $10/t w-o-w to around $375/t CFR Qasim for the week ended 20 January, driven by tightening European supply and firmer upstream cost pressure. While offers from the EU were quoted as high as $375-376/t, workable levels remained closer to $370-372/t, reflecting cautious buyer participation.
Recent deals underline resistance at higher levels in Pakistan’s containerised scrap import market. Multiple 500-t parcels of EU- and UK-origin shredded scrap were concluded in the $365-372/t CFR Qasim range, with bids still clustered near $368/t.
A Bahrain-origin shredded parcel was booked at $372/t CFR, marking the upper end of workable levels. Overall, around 6,000 t of containerised scrap was concluded on a CFR Qasim basis. Shredded scrap accounted for approximately 4,000 t, sourced from the EU, UK, and Bahrain, while HMS and sheared HMS, largely from the UAE, made up the remaining about 2,000 t, traded at $356-362/t.
Local scrap and steel markets firm
Domestic sentiment improved modestly as international prices firmed. A Karachi-based mill source said local shredded scrap traded at PKR 134,000/t ex-warehouse Port Qasim ($479/t) on cash terms, while delivered Lahore prices were around PKR 143,000/t ($511/t).
“Whenever the import market moves up, the pressure shows up immediately in local scrap,” the source noted, adding that domestic prices have risen PKR 3,000-4,000/t over the week.
Mill utilisation has inched up but remains uneven, averaging close to 40%, with some regions still operating below 35%. Finished steel prices provided partial support, with billets heard at PKR 185,000-188,000/t ($662-672/t) and rebar at PKR 220,000-225,000/t ($787-805/t). Domestic scrap values were indicated at PKR 135,000-136,000/t ($483-486/t), while bala scrap was quoted higher at PKR 180,000-182,000/t ($644-651/t).
Pakistan has climbed to second place in regional ship-recycling rankings on relatively stable pricing, despite limited movement in offer levels. However, firmer sentiment has not translated into arrivals at Gadani, as vessel supply remains scarce and deal execution is slowed by a lack of HKC-approved yards and hesitation around the Document of Authorisation for Ship Recycling (DASR) procedures.
Local fundamentals remain weak, with steel plate prices steady at around $600/t and the rupee slipping nearly 0.5% to 280/$. While Pakistan’s first HKC-approved yard marks a positive step, near-term inflows are expected to stay limited.
Outlook
Imported shredded scrap prices are expected to stay firm in the near term on constrained European supply and improving local sentiment. However, cautious buying behaviour, fragile mill utilisation, and currency weakness are likely to cap aggressive upside.
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