Import scrap activity in Pakistan has remained muted this week due to the still unresolved problems with opening letters of credit (LCs), coupled with extremely slow sales of finished steel amid weak end-user demand. Besides, the recent good news regarding the removal of the cash margin requirements for imports is good for most steel importers in Pakistan, except for those who deal with ferrous scrap.
More specifically, offers for ex-UK shredded scrap in containers have settled at $470-475/mt CFR, down by $10/mt over the past week. According to market insiders, import scrap prices are going down amid extremely slow buying in Pakistan, coupled with bearish sentiments globally following two ex-US scrap deals in Turkey done last week at lower levels. Besides, although the State Bank of Pakistan has announced the removal of the existing 100 percent cash requirement margin on 177 imported products, no changes are expected in the import scrap segment.
In the meantime, Pakistani rebar producers have continued to offer their 10-12 mm rebar of grade 60 at PKR 280,000-289,000/mt ($989-1,021/mt) ex-works Lahore and at PKR 286,000-288,500/mt ($1,010-1,019/mt) ex-works Karachi, the same as last week. At the same time, according to sources, rebar sales have remained slow in Pakistan, and the workable prices have been assessed by some local buyers at around PKR 255,000/mt ($900/mt) ex-works.
Meanwhile, local scrap equivalent to shredded in Pakistan has been offered at around PKR 185,000/mt ($653/mt) ex-warehouse, down by PKR 5,000/mt ($18/mt) week on week.
All prices on Pakistani rupee basis include 18 percent VAT.
$1 = PKR 283.15