Pakistan's import scrap market has strengthened over the past week, with buying activity resuming and prices for ex-UK/EU material moving upward amid higher freight costs and renewed uncertainty surrounding Middle Eastern supply routes. Several fresh bookings have been concluded above last week's levels, while sellers have continued to raise their indications. Nevertheless, weak finished steel demand and the ongoing monsoon season are expected to limit the extent of any further price increase.
More specifically, 500 mt of ex-EU shredded scrap were sold at $403/mt CFR Qasim, while 2,000 mt of ex-UK shredded scrap were sold at $403-405/mt CFR Qasim. Subsequently, some negotiations for ex-EU/UK shredded scrap have already been held at up to $410/mt CFR Qasim.
Current offers for ex-UK/EU shredded scrap have been heard at $405-415/mt CFR Qasim, compared to $395-400/mt CFR Qasim last week. Negotiable and workable levels have generally been indicated at around $403-410/mt CFR Qasim, depending on shipment timing, tonnage and cargo availability, posting a significant increase from the $390-398/mt CFR Qasim range reported last week.
“Buying has resumed and offers are moving upward, although the rainy season and persistently weak finished steel demand are likely to prevent prices from rising too sharply,” a source in the market told SteelOrbis.
Meanwhile, UAE-origin offers have remained absent during the week, as uncertainty regarding shipments through the Strait of Hormuz has continued to restrict the availability of Middle Eastern cargoes. Consequently, Pakistani buyers have increasingly turned toward UK- and EU-origin material.
There has also been talk that some UAE-origin material may be reaching Pakistan indirectly through Oman. In this context, sheared HMS scrap has been offered at around $405/mt CFR Pakistan. However, no confirmation has been received at the time of writing.
In Pakistan's domestic market, finished steel prices have increased despite continued weakness in underlying demand. Amreli Steels has raised its grade 60 rebar booking price by PKR 2,000/mt ($7/mt), effective July 22. Accordingly, Amreli Steels grade 60 rebar has been offered at PKR 249,000/mt ($895/mt) ex-works. This follows the price increases announced by other Pakistani bar producers last week, although no broadly confirmed market level for grade 60 rebar had been available at that time.
The increase has been attributed partly to higher oil and transportation costs. However, market participants have continued to describe finished steel demand as weak, with monsoon rains limiting construction activity. As a result, scrap procurement is likely to remain focused mainly on immediate requirements until finished steel sales show a more substantial recovery.
All prices on Pakistani rupee basis include 18 percent VAT.
$1 = PKR 278.30
