After weeks of constant price decreases, this week import scrap prices in Pakistan have been relatively stable amid some signs of improvement in the Turkish market. However, the import scrap trade has still been muted in the country as, on the one hand, opening new letters of credit (LCs) has remained a big problem, while, on the other hand, end-user demand has left much to be desired during Ramadan. Besides, the continuing instability of the Pakistani rupee and higher production costs have been adding to the pressure on local steel manufacturers.
This week, import prices of shredded scrap of UK and European origin in containers to Pakistan have been voiced at the same level as in the previous week, largely at $460-470/mt CFR.
At the same time, the Pakistani rupee has been under immense pressure this week, plunging to a historic low of above PKR 288 against the US dollar. Pakistan has been facing a foreign exchange crisis due to a decrease in foreign exchange reserves, a widening current account deficit, and delays in obtaining loans from international organizations such as the IMF. Besides, the political uncertainty surrounding provincial elections has increased the pressure on the currency market in Pakistan.
Meanwhile, local prices of scrap equivalent to shredded in Pakistan have remained unchanged, standing at PKR 170,000-175,000/mt ($590-607/mt) ex-warehouse. Furthermore, the tradable prices for local 10-12 mm rebar of grade 60 have settled at PKR 270,000-280,000/mt ($937-972/mt) ex-works, the same as last week.
All prices on Pakistani rupee basis include 18 percent VAT.
$1 = PKR 288.13