The uncertainty as regards the future price trend in the global scrap market amid controversial developments has continued to weigh on scrap offers to Pakistan. Specifically, with the winter season approaching and scrap collection becoming more challenging, global scrap suppliers are abstaining from giving lower offers. However, the resistance of buyers due to the mounting bearish sentiments in the finished steel segment has forced scrap suppliers to cautiously revise their scrap offers in order to obtain orders.
As a result, scrap offers to Pakistan have continued to fluctuate this week. In particular, while in the beginning of the current week European suppliers were seeking to get $565-570/mt CFR for shredded 211 scrap in containers, by the end of the week they appear to be ready to book material at $560/mt CFR. “Local scrap stocks are tight, causing an incessant rise in prices. Additionally, a severe volatility in the currency rate exerts pressure, making the business environment highly challenging,” an official at a Pakistan-based rebar mill stated, commenting on the current situation in the market.
Meanwhile, prices for local scrap equivalent to shredded have risen by PKR 5,300/mt ($30/mt) to PKR 127,200/mt ex-warehouse Lahore. The changes in the dollar equivalent is less visible due to the devaluation of the national currency. Specifically, dollar-based scrap prices have increased only by $9/mt over the past week, to $724/mt ex-warehouse Lahore.
In the meantime, 10-12 mm rebar of grade 60 in Pakistan is available at PKR 188,500-192,500/mt ($1,072-1,095/mt) ex-works.
All prices on Pakistani rupee basis include 17 percent VAT.
$1 = PKR 175.75