Pakistan: Pre-Ramadan restocking lifts imported shredded scrap prices by $7/t w-o-w

• Scrap prices expected firm on tight supply, low stocks
• UAE and EU origin scrap buying accelerates ahead of Ramadan

Imported shredded scrap offers into Pakistan improved by $7/t w-o-w to around $383-385/t CFR Qasim, as assessed on 3 February. The EU-origin shredded scrap assessment stood at $385-388/t CFR Qasim, up by $8-10/t w-o-w.

However, workable levels are now closer to $380-382/t CFR, with several trades heard around $385/t CFR. This short-term lift is largely driven by pre-Ramadan buying, as Ramadan begins on 17 February and market participants are rushing to complete procurement before business activity typically slows. As a result, demand has picked up slightly for now, reflecting timing-led buying rather than a fundamental improvement in underlying consumption.

Market comments

A Pakistan-based scrap trader commented that EU shredded scrap offers are currently seen at $388-390/t CFR, while buyers are bidding around $382-385/t CFR. Recent deals include 1,000 t of UK-origin shredded scrap at $385/t CFR Qasim and 500-1,000 t of Malaysia-origin shredded scrap at $382/t CFR Karachi Port. He added that Pakistan’s scrap market remains elevated, supported by global supply tightness and renewed restocking activity in Turkiye.

As per a Karachi-based steelmaker, capacity utilisation has improved to around 50% in a few regions, though the overall average remains at 35-40%. Tight local scrap availability is forcing most mills to rely on imports. Domestic scrap is currently assessed at PKR 135,000-140,000/t ($483-501/t). Finished steel prices are quoted at PKR 222,000-225,000/t for rebar ($794-805/t) and PKR 192,000-196,000/t for billet ($687-701/t). Bala scrap is heard at PKR 188,000-190,000/t ($672-679/t). Despite firmer steel prices, mills continue to face margin pressure.

As per a major trading house representative, active purchasing has recently picked up from the UAE and the EU, as mills rush to cover near-term requirements. With only around two weeks left before the start of Ramadan, buying activity is expected to slow sharply during the fasting month and resume only after the Eid holidays. Capacity utilisation is therefore unlikely to rise meaningfully in the near term, though levels above 40% may be possible post-Eid. Currently, UAE-origin offers are heard at $400/t CFR Qasim for shredded scrap and $375/t CFR for sheared HMS.

Ship-recycling

Gadani strengthened its position after Salams International became Pakistan’s second Class NK-approved, HKC-certified yard, improving international credibility and buyer confidence. Local steel prices remained firm at around $587/t, while the rupee weakened to near PKR 279-280. Despite currency pressure, several Handymax and Panamax vessels were sold, supported by steady demand for larger units. Improving compliance and infrastructure continues to support Gadani’s gradual recovery in the regional ship-recycling market.

Outlook

Imported scrap prices in Pakistan are expected to remain firm, supported by tight availability from Europe and the Middle East. Persistent local scrap shortages and low inventories across the domestic market are likely to support elevated offers from suppliers, potentially translating into upward pressure on finished steel prices in the near term.