Imported scrap trade in Pakistan slowed down w-o-w as against active bookings seen last week. A continuous decline in iron ore prices, sluggishness of Turkish buyers in making fresh bookings and subdued market sentiments in neighbouring countries like India and Bangladesh, could be the possible factors leading to a drop in scrap prices, SteelMint learnt from market sources.
“Yesterday, a deal of around 7,000-8,000 t of UK/EU-origin shredded was concluded at $525/tonne (t) CFR Port Qasim basis. However, only major buyers are active at the moment while small and mid-sized steel producers showed resistance, waiting for a further price correction,” said a major scrap trader based in Pakistan.
Recent offers
- Fresh offers for UK/EU-origin shredded are being offered at $520-525/t CFR levels. A few small traders tried to sell high seas cargo even at $520-523/t CFR levels.
- HMS 1 from Dubai is being traded at $495-500/t CFR Qasim basis.
On the other hand, Pakistan’s government has released a notification to decrease the sales tax imposed on steel scrap used by furnaces. Earlier, the tax levy was 17% which has now been lowered to 14%, sources confirmed to SteelMint. However, the changes will not have much impact on production cost except on working capital.
“It has been reduced but will not have any net effect as duty is only reduced at the import stage. Final liability, however, will remain the same,” said a steel producer
Domestic steel prices in Pakistan fall: The domestic steel market has become weak due to low demand seen since the last few days. Rebar sales have slowed down due to rainy weather all over Pakistan in the last two weeks, especially in north Pakistan which resulted in lower bookings of Grade-60 rebars in the last few days.
SteelMint’s price assessment for rebar in Pakistan’s Punjab region stands at PKR 172,000/t exw, witnessing a sharp fall by PKR 2,000/t w-o-w.
SteelMint’s assessment of local shredded scrap prices has dropped by PKR 3,500/t to PKR 111,500/t exy-Punjab.
Market highlights
- Mughal Iron and Steel posts stronger profits: Mughal Iron & Steel, a leading steel mill in Pakistan, declared its annual results today.
The profit for the year ended 30 Jun’21 was at $20.4 mn as compared to $3.53 mn in the same period last year. Another major development was that Mughal Steel was included in the KSE-100 index by the Pakistan Stock Exchange, earlier this week. - Ferrous scrap imports up 20% m-o-m in Aug’21: A leading South Asian ferrous scrap importer, Pakistan, recorded an increase in monthly imports by 20% in Aug’21. The country’s scrap imports stood at 0.30 mn t in Aug against 0.25 mn t in the preceding month, as per data maintained with SteelMint.
Outlook
Imported scrap buyers expect that prices will come down in the near term following the global trend. Furthermore, steel makers expect rebar prices to decrease owing to a slow demand in the domestic market, mostly from end-consumers.
Leave a Reply