Pakistan’s import scrap market has moved up further over the past week, supported by tight supply and sharply higher freight costs. Market sentiment has remained firm overall, although buyers have shown some resistance at higher levels and have shifted to a wait-and-see approach following the ceasefire announcement in the Iran war.
More specifically, offers for ex-UK/EU shredded scrap have been reported at $425-435/mt CFR Qasim, up from $420-430/mt CFR last week. According to market insiders, after several deals were reported to have been signed at $415/mt CFR Qasim earlier this week, more deals have been heard at $420/mt and $425/mt CFR, respectively, while the latest transactions for 1,000 mt cargoes have reached $430/mt CFR Qasim. In addition, around 2,000 mt have been sold at $425/mt CFR and another 2,000 mt at $430/mt CFR. Meanwhile, by Wednesday, April 8, new offers for ex-UK/EU shredded scrap have touched $435/mt CFR for transit cargoes, though workable levels have been heard at $425-430/mt CFR.
Negotiable levels have varied depending on tonnage, payment terms and delivery conditions, with most buyers targeting the lower end of the range.
Offers for scrap from the UAE have remained largely absent, with material effectively disappearing from the market due to ongoing geopolitical disruptions. Buying interest has shifted toward the UK, Europe and South Africa. Market sources told SteelOrbis that 500 mt of ex-UK PNS scrap have been sold at $427/mt CFR. In addition, 500 mt of ex-South Africa NTP bundles have been sold at $385/mt CFR while another 500 mt of ex-South Africa sheared HMS scrap have been sold at $420/mt CFR.
In the meantime, in Pakistan’s domestic market, scrap prices have increased sharply amid supply shortages. Local scrap prices equivalent to shredded have been heard at PKR 165,000-170,000/mt ($592-610/mt) ex-warehouse, up from PKR 160,000/mt ($573/mt) ex-warehouse heard last week. Meanwhile, grade 60 rebar prices have risen to PKR 275,000-280,000/mt ($987-1,006/mt) ex-works, compared to PKR 260,000/mt ($932/mt) ex-works and above heard last week. Demand for finished steel has shown a gradual improvement, though mills have continued to operate at low capacity utilization levels of around 30-40 percent. “Imported scrap remains strong due to supply shortages, while domestic demand is picking up gradually,” a market insider told SteelOrbis.
Local activity may ease over the next 20 days following the ceasefire and the expected reopening of the Strait of Hormuz. However, the actual impact on freight and scrap prices will only become clear if the current situation continues throughout that period. If stability holds, the market may see some correction. Otherwise, it is likely to maintain the current trend,” a Pakistani trader told SteelOrbis.
All prices on Pakistani rupee basis include 18 percent VAT.
$1 = PKR 278.68
