Pakistan’s import scrap market has remained under pressure over the past week, with trading activity slowing further as buyers have limited purchases to just urgent requirements ahead of the Ashura holiday. Even though scrap prices have declined, there are expectations of further corrections after the holiday period.
More specifically, ex-UK/EU shredded scrap has been traded at around $413/mt CFR Qasim this week, slightly below the $415-417/mt CFR transaction levels heard last week. According to sources, the latest confirmed deal was concluded yesterday, June 23, for 500 mt, while another 1,500 mt cargo was still under negotiation at the time of writing. Earlier in the week, ex-UK/EU shredded scrap was traded at not below $415/mt CFR Qasim, while buyers have been increasingly targeting lower levels. Meanwhile, lower indications at around $398-410/mt CFR have so far been heard mainly as buyers’ targets rather than as confirmed tradable levels, amid expectations of a further correction after Ashura on June 26. “The market is very slow, and buying is limited only to urgent requirements,” a Pakistani trader told SteelOrbis. Another source said, “The market is dead slow now,” adding that most activity has almost stopped.
Market sources have indicated that the recent reopening of the Strait of Hormuz has eased the short-term pressure on sentiment, as concerns over supply disruptions and higher freight costs have diminished. However, some insiders believe the impact on the scrap market may be delayed, as insurance costs are expected to move down only gradually over the next two to three months. At the same time, buyers remain cautious amid uncertainty regarding the US-Iran talks. “Every investor is waiting for the finalization of this deal,” a market insider told SteelOrbis, adding that the possible reopening of the Iranian market could allow cheaper secondary iron items from Iran to enter the Pakistani local market, potentially limiting import volumes.
In the Pakistani domestic market, local scrap prices have come under further pressure, while finished steel demand has remained subdued, with both sales and production reported to be below normal levels. Local scrap prices equivalent to shredded have been heard at PKR 140,000-145,000/mt ($502-520/mt) ex-warehouse, down by PKR 7,000-12,000/mt ($25-43/mt) from PKR 152,000-156,000/mt ($546-561/mt) ex-warehouse reported last week. As for finished steel, local 10-12 mm grade 60 rebar prices have been heard at PKR 245,000-253,000/mt ($879-908/mt) ex-works, broadly in line with the levels reported last week. Although rebar prices have remained largely stable, market participants said demand is still weak, with buyers cautious ahead of the holidays and mills’ capacities still underutilized.
All prices on Pakistani rupee basis include 18 percent VAT.
$1 = PKR 278.60
