Pakistan's import scrap market has strengthened considerably over the past week, with buying activity accelerating and freight rates increasing together with war-risk premiums for shipments from Europe. Several fresh bookings have been concluded well above last week's levels, while expectations surrounding the forthcoming notification on the new tax mechanism have encouraged mills to secure additional imported material. Nevertheless, the monsoon season has continued to restrict the pace of domestic activity.
More specifically, 2,000 mt of ex-UK shredded scrap have been sold at $415-416/mt CFR Qasim, followed by a later booking of 500 mt concluded at $420/mt CFR Qasim. Current offers for ex-UK shredded scrap are heard at around $420/mt CFR Qasim, compared to $405-415/mt CFR Qasim last week. Accordingly, the latest reference price for import shredded scrap in Pakistan have increased by $10-12/mt over the past week to $415-420/mt CFR Qasim, versus the $403-410/mt CFR Qasim range reported in the previous week.
The latest price increase has been supported by costlier shipping conditions and renewed inventory replenishment by Pakistani mills, amid persistent uncertainty affecting regional trade routes. In addition, market participants are awaiting the official notification regarding the proposed electricity-based sales tax mechanism. Industry representatives have proposed differentiated sales tax rates for compliant and non-compliant steel units, with mills using a higher proportion of imported scrap expected to benefit more under the proposed system.
“I foresee aggressive buying in the near future because of the change in the taxation system. Hopefully, the notification will be issued soon,” a source in the market told SteelOrbis. Another market insider confirmed that greater use of imported scrap could provide mills with higher sales tax benefits once the mechanism is formally implemented.
Meanwhile, ex-UAE material has returned to the Pakistani market, with 500 mt of ex-Dubai sheared HMS I/II 80:20 sold at $410/mt CFR Qasim. Following this transaction, fresh offers for ex-Dubai HMS scrap and sheared HMS scrap have been heard at around $410/mt CFR Qasim and $415/mt CFR Qasim, respectively. This marks a significant change from last week, when UAE origin offers remained largely absent amid uncertainty regarding Middle Eastern shipping routes.
In Pakistan's domestic market, demand for good-quality scrap has improved, although overall activity has continued to be restricted by the monsoon season. Local scrap equivalent to shredded has been sold at around PKR 155,000/mt ($558/mt) ex-Karachi, with one market source reporting sales of approximately 1,000 mt at this level.
Meanwhile, grade 60 rebar prices have been heard at PKR 242,000-250,000/mt ($871-900/mt) ex-works, compared to Amreli Steels' booking price of PKR 249,000/mt ($895/mt) ex-works reported last week. Buyers have largely adopted a wait-and-see approach, while dealers have also reduced their transaction volumes. Although prices have remained firm for now, the market could come under pressure unless steel demand starts to recover.
All prices on Pakistani rupee basis include 18 percent VAT.
$1 = PKR 277.85
