Market participants have expressed a cautiously positive view regarding the outlook for local Pakistani steel and scrap demand, following the measures included in Pakistan’s fiscal budget for 2026-27. Local scrap prices have already posted some increases.
In particular, the reduction in the property purchase withholding tax for tax filers, together with federal and provincial subsidized housing programs, could support construction activity and steel consumption over the medium term. A local market source estimated that the housing programs could potentially cover around 200,000-250,000 residential units, generating sizeable additional demand for long steel products if the approved financing is effectively disbursed and construction work proceeds as planned. However, sources stressed that no material improvement in rebar demand has emerged so far, as the market remains affected by monsoon rains, flooding in northern regions and generally weak purchasing activity.
Nevertheless, local commercial-grade scrap prices have found support and increased by around PKR 3,000-4,000/mt ($11-14/mt) over the past week. Local scrap equivalent to shredded has been heard at PKR 146,000-150,000/mt ($525-539/mt) ex-warehouse, up from PKR 141,250-142,500/mt ($508-512/mt) ex-warehouse reported last week. Graded scrap prices have yet to show the same increase, although market sources expect some upward movement if imported scrap prices remain supported.
As for finished steel, no broadly confirmed fresh market level for grade 60 rebar has been received at the time of writing. However, Moiz Steel has announced a PKR 5,000/mt ($18/mt) increase in its grade 60 rebar prices, effective July 15, citing higher international scrap prices and ongoing supply chain disruptions. Other bar mills have also attempted to increase their prices by around PKR 5,000/mt in order to support the market, although weak sales and subdued construction demand may limit the effective implementation of the higher levels.
As a result, the recent increase in local scrap prices has not yet been fully passed on to finished steel prices, adding further pressure on bar mills’ margins.
“The budget measures could provide some support to construction and steel consumption in the medium term, but for now mills are still facing weak sales and the rains are keeping business activity within a limited range,” a Pakistani market insider told SteelOrbis.
All prices on Pakistani rupee basis include 18 percent VAT.
$1 = PKR 278.15
