- Mills maintain only 35-40% capacity utilisation
- UK, Europe offers edge up on increased freight rates
Pakistan’s imported ferrous scrap market rebounded during the 21 July as rising freight costs, renewed geopolitical tensions around the Strait of Hormuz, and improving buying interest for prompt cargoes lifted import prices. However, weak domestic steel demand and the ongoing monsoon season continued to limit aggressive procurement.
BigMint assessed Europe/UK-origin shredded scrap at $405/t CFR Port Qasim, up by around $9/t w-o-w.
Import sentiment improved after hopes of a near-term reopening of the Strait of Hormuz faded, prompting buyers to restock prompt-arrival cargoes. At the same time, rising freight rates from the UK and Europe, higher war-risk concerns, and exchange rate fluctuations between the British pound and US dollar supported sellers’ offer prices.
UK/Europe-origin shredded scrap offers increased to $405-412/t CFR Port Qasim, compared with around $395-400/t CFR at the beginning of the week. Buyers initially maintained bids at $396-400/t CFR, but tradable values gradually moved up to $400-405/t CFR, while prompt cargoes were heard workable at $405-410/t CFR.
Market participants also reported that UK recycling yards were targeting $410/t CFR, reflecting expectations of further freight increases from next week. Meanwhile, Malaysia-origin shredded scrap was offered at $428/t CFR Port Qasim, remaining uncompetitive.
Trades during 15-21 July
- UK-origin shredded scrap: 1,000 t booked at $398/t CFR Port Qasim
- UK-origin shredded scrap: 2,000 t booked at $403-405/t CFR Port Qasim
- North Africa-origin moon-cut pipes: 810 t booked at $395/t CFR Port Qasim
- EU-origin shredded scrap: 500 t booked at $403/t CFR Port Qasim
- EU-origin NTP: 2,000 t booked at $415/t CFR Port Qasim
- UK-origin Blue Steel: 1,000 t booked at $421/t CFR Port Qasim
- UK-origin Short Steel: 500 t booked at $415/t CFR Port Qasim
Domestic steel market conditions also strengthened during the week. Quality domestic scrap was heard at PKR 150,000-152,000/t ($540-551/t), while CC billet traded at PKR 205,000-210,000/t ($738-749/t) and grade-60 rebar was assessed at PKR 240,000-245,000/t ($875-882/t).
However, mills remained cautious as the ongoing monsoon season continued to weigh on construction activity and billet demand. Participants noted that lower Turkish import scrap prices and weak regional steel demand continued to limit confidence, preventing a sharper recovery despite firmer import offers.
A Karachi-based trader said, “Buyers are securing prompt cargoes as uncertainty over the Strait of Hormuz has increased. Freight costs are also expected to rise further, supporting import offers.”
Another trader said, “The market has improved, but the rainy season is likely to cap further price increases as finished steel demand remains weak.”
Despite the improvement in domestic prices, overall steel demand remained subdued, with mills operating at only 35-40% capacity utilisation and company sales estimated at around 35%, keeping scrap procurement largely need-based.
Outlook
BigMint expects Pakistan’s imported scrap market to remain firm in the coming week as rising freight costs, geopolitical uncertainty, and prompt cargo demand continue to support import offers. However, seasonal monsoon conditions, weak finished steel demand, and cautious mill procurement are expected to limit further price gains, with buyers likely to remain focused on immediate requirements.
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