This week has brought another decrease in import scrap prices in Pakistan which has resulted in new bookings. Meanwhile, local steel manufacturers have continued to face cost-related challenges amid yet another increase in power costs. Thus, at the beginning of the week, representatives of the Pakistan Association of Large Steel Producers (PALPS) issued a strong warning regarding an imminent surge in steel rebar prices driven by soaring energy costs and called on the government to provide the steel industry with electricity at reduced rates, which would promote maximum capacity utilization.
The deal price levels for ex-UK/Europe shredded scrap have settled at $425-428/mt CFR Qasim, versus the tradable levels of $430-435/mt CFR last week. A few deals for around 1,000 mt each have been reported at $425/mt CFR, according to sources.
Meanwhile, local prices equivalent to shredded have settled at PKR 175,000-183,000/mt ($610-638/mt) ex-warehouse. Tradable prices for local rebar 10-12 mm of grade 60 have been estimated at PKR 285,000-288,000/mt ($993-1,003/mt) ex-works, relatively stable on Pakistani rupee basis over the past week, but up by around $60-70/mt on US dollar basis amid the appreciation of the national currency.
According to many sources, steel prices, for local rebar in particular, are set to increase in the short run due to rising energy costs despite the stronger rupee and lower scrap prices. However, some market insiders do not share this point of view and believe there is still some room for a drop “as letters of credit (LCs) have started to be opened, while the scrap rate is expected to decrease locally.”
$1 = PKR 286.97
