Imported scrap prices in Pakistan have increased over the past two weeks, supported by firmer offers from the EU/UK and the UAE. However, sluggish steel demand and persistent tax uncertainties in the construction sector continue to weigh on buying interest. Adding to the market caution, rising geopolitical tensions and the uncertainty surrounding the potential closure of the Strait of Hormuz have begun to cast a shadow over Pakistan’s scrap import outlook, raising concerns over supply disruptions and higher freight costs.
More specifically, this week, offers for ex-Europe/UK shredded scrap in containers have been voiced mainly at $377-380/mt CFR, compared to $370-375/mt CFR two weeks ago. According to sources, although some market insiders have continued to insist on discounts, assessing workable levels at $375/mt CFR, several deals for shredded scrap from the UK have been signed at $380/mt CFR.
Meanwhile, ex-UAE shredded scrap offers have been voiced at around $388-395/mt CFR, against $382-385/mt CFR two weeks ago, while offers for HMS grade scrap have been reported at $365/mt CFR.
At the same time, uncertainty in the Strait of Hormuz has begun to cast a shadow over Pakistan’s scrap import market. Iran's parliament has approved a motion to block the vital waterway, though the final decision now rests with the country’s Supreme National Security Council. The implications are significant, as 20-30 percent of the Gulf region’s oil and gas supply - along with a large volume of commercial cargo - passes through this strategic channel.
According to sources, for Pakistan, this development could disrupt arrivals of scrap material originating from key suppliers such as Oman, UAE (Jebel Ali), Kuwait, Saudi Arabia, Qatar, and Bahrain, as there is no alternative maritime route from these countries except through the Strait of Hormuz. While shipments from the UK, Europe, the US, and Canada are not directly affected - as they bypass the Gulf entirely - the global shipping industry is already bracing for a wider fallout.
“Major carriers such as MSC, Maersk, CMA CGM, and Hapag-Lloyd are likely to impose war risk surcharges, emergency fuel adjustments, and reroute vessels away from the Gulf. This may cause delays, port congestion, and higher freight costs - even for shipments not passing through the Strait of Hormuz - prompting Pakistani importers to brace for longer lead times and rising logistics expenses,” a market insider told SteelOrbis.
Meanwhile, local prices of scrap equivalent to shredded in Pakistan have settled at around PKR 140,000/mt ($491/mt) ex-warehouse, mainly the same as two weeks ago. Besides, the tradable level for local 10-12 mm rebar of grade 60 has been heard at PKR 235,000-240,000/mt ($824-842/mt) ex-works, moving sideways over the past two weeks.
All prices on Pakistani rupee basis include 18 percent VAT.
$1 = PKR 285.04