Pakistan’s major steel producers raised their domestic rebar prices significantly by PKR 5,000-8,000/t, effective from 9 January, 2023. Prices increased due to the continuous hike in raw material prices and the cost of production.
Meanwhile, the prices for local scrap also increased due to material shortages in global and domestic markets.
In the recent price revision, the country’s only 100% EAF technology steel producer, Agha Steel, revised its rebars offered by PKR 4,000-5,000/t ($17-22/t) for 16-32 mm at PKR 231,500/t and for 10-12mm at PKR 233,500/t exw-Punjab, including taxes. However, the tradable prices are lower by PKR 5,000-6,000/t ($22-26/t).
Following the cue, other major mills like Amreli Steel and Naveena Steel increased their rebar prices by up to PKR 8,000/t.
SteelMint’s assessments for G-60 (10-12 mm) are at PKR 229,000-233,000/t ($1,001-1,019/t) moving up by PKR 9,000/t ($39/t) w-o-w.
Further, major steel mills like Aisha Steel Mills and Hadeed Pakistan Pvt Ltd increased prices of cold-rolled coils (CRCs) and coated flat steel products by PKR 5,000/t ($22/t).
Appreciation of USD against PKR and an uptrend in global steel and raw material prices have pushed mills to raise prices in January, sources informed.
Domestic scrap prices are at the highest levels since September 2022 due to tight supplies. Fresh offers for local scrap are at PKR 155,000-160,000/t ($678-670) exy-Punjab, up by PKR 5,000/t w-o-w.
Pakistan domestic prices
Imported scrap prices largely stable w-o-w
Pakistan’s imported scrap prices largely remained unchanged this week, after witnessing active bookings last week. Steel mills have actively secured many scrap cargoes as prices rose significantly. Further, imported scrap prices remained higher on account of low scrap generation due to holidays and heavy snowfall in prominent scrap supplying countries like the US/Europe.
SteelMint’s assessment for shredded scrap in containers stands at $465-470/t CFR, slightly up $5/t w-o-w. Prices are hovering at a four-month high. Some deals were concluded last week before the holidays at $460-463/t towards last weekend.
Moreover, active bookings of imported scrap by Turkish mills resulted in a massive increase in prices in South Asian countries. The prices for Turkiye saw a measurable hike of over $40/t in the last two weeks.
In addition, the Pakistan Association of Large Steel Producers has urged the State Bank of Pakistan and the Minister of Finance to help the troubled steel industry by ensuring the timely opening of letters of credit (LCs), as per reports.
The steel industry is moving towards closure, as the issue of non-issuance of LCs is paralysing the production activities of the sector. The industry is facing acute difficulties in importing raw materials due to the delay in opening up the LCs.
For instance, banks are refusing to open LCs, citing government’s instruction to open them only for essential items. If this situation persists, it will result in a shortage of steel in the country, which will eventually lead to further escalation in steel prices.
PKR falls slightly against the dollar: The national currency is slightly down this week. The PKR declined to 228.5 against the dollar.
Outlook: Imported scrap prices are likely to remain high on active bookings and material shortage, despite the slow finished steel consumption, and dull domestic market sentiments. Due to the country’s economy currently facing one of its worst crises as its foreign exchange reserves fell to a critical level, the steel mills are cautious.
Leave a Reply