Following the recent amendments in the customs policy with regard to imports of hot rolled coil (HRC) in Pakistan and a consequent decrease in prices in the local market, both Pakistani re-rollers and steel pipe mills have become more reluctant as regards concluding new import purchases. Sufficient inventories in the spot market have given Pakistani buyers time to closely watch developments in the global flats market and meet their urgent needs locally. Moreover, some market insiders do not exclude that import HRC offers may soften in the coming days amid the prevailing uncertainty in the global steel market.
Accordingly, following the recent revision of the duty structure by Pakistan’s government, the customs duty on HRC in Pakistan was reset to zero for all importers, effective from July 1, while previously it was five percent for re-rollers and 11 percent for pipe mills. Meanwhile, the regulatory duty was cut to five percent from six and 11 percent, depending on the origin.
Subsequently, local retailers have reduced their offers by around PKR 7,000-8,000/mt PKR ($44-50/mt) within the past week to PKR175,000-195,000/mt ($1,108-1,235/mt) ex-warehouse, which made Pakistani HRC end-users to prefer restocking in the local spot market.
Meanwhile, foreign suppliers have not been in a hurry to lower their prices for the Pakistani market. Specifically, ex-Japan SAE1004 HRC has been heard at $1,090/mt CFR Karachi this week, with no success in booking reported yet due to lower bids from a customer. The latter has been reluctant to negotiate at higher than $1,050/mt CFR Karachi, expecting import prices to come down in the coming days. Ex-China SAE1004 HRC offers have been voiced in a wide range this week. Accordingly, offers from China-based mills have been heard at $950-1,000/mt CFR Karachi, versus $990-995/mt CFR Karachi heard a week ago. Traders, in their turn, have been ready to book ex-China material purchased earlier at $885-900/mt CFR Karachi, market sources report.