With bearish sentiments in the global steel market mounting lately, import scrap activity in Pakistan has to some extent been muted, with most buyers holding back in anticipation of cheaper offers. Meanwhile, foreign scrap suppliers have maintained a cautious stance in offerings, aiming to prevent prices from recording a fall.
Specifically, during the current week offers of shredded 211 scrap of European origin in containers have been heard at $560-565/mt CFR, with rare deals for small lots concluded at the low end of the range. By the end of the week, rare ex-UK offers at $555-557/mt CFR have appeared in the market. Ex-UAE HMS scrap has been available at $530/mt CFR Qasim, unchanged compared to the previous week.
Meanwhile, local traders have been revising their offer prices in accordance with the developments in the global market, thereby encouraging customers to book material locally. According to sources, by the end of the current week prices for local scrap equivalent to shredded have fallen by around PKR 4,000/mt ($23/mt) to an average PKR 121,500/mt ($694/mt) ex-warehouse.
At the beginning of the week, Pakistan-based rebar mills issued a new hike in offer prices, aiming to offset higher input costs. As SteelOrbis reported earlier, local prices for 10-12 mm rebar of grade 60 in Pakistan have increased by PKR 5,000/mt ($28.5/mt) to PKR 193,500-197,500/mt ($1,107-1,129/mt) ex-works. Among other reasons for the price revision, rebar producers have been citing the recent changes in the sales tax structure in Pakistan. Accordingly, Pakistan's Federal Board of Revenue (FBR) has raised the minimum prices of steel bars and other long products to PKR 153,000/mt, while it raised the minimum price for billet to PKR 131,000/mt and that for steel scrap to PKR 119,000/mt, respectively. However, the consequences of the abovementioned revision for the margins of re-rollers are “far-fetched”, according to the sources. Hence, it remains to be seen whether end-users accept the new levels in new bookings, coupled with the latest developments in the scrap market.
All prices on Pakistani rupee basis include 17 percent VAT.
$1 = PKR 174.876