Despite a slight drop in import scrap offer prices, Pakistani buyers have remained inactive this week amid still slow domestic demand in the construction sector. Besides, the currency devaluation in Pakistan and the liquidity issue seen during past weeks have affected the market.
Specifically, within the past week import offers of ex-UK/EU scrap in containers to Pakistan have fallen to $450-460/mt CFR, down by $10-15/mt since the beginning of last week. However, according to market insiders, some bids are standing at $445/mt CFR. “There are not so many inquiries due to serious problems with opening LCs. Banks can open LCs with 100 percent margins and with US dollar rates higher than interbank rates,” a Pakistan-based trader told SteelOrbis. Besides, offers for ex-UAE HMS grade scrap have been voiced at $485/mt CFR, compared to $500-510/mt CFR last week.
At the same time, some market insiders are quite optimistic in terms of future demand, expecting that consumption in Pakistan will increase with the passage of time, because there is no material left in the market and the whole focus will be on imports. “We believe the price level will fluctuate by $20-25/mt during the first half of August,” another trader stated.
Domestic prices of scrap equivalent to shredded have settled at around PKR 142,000/mt ($609/mt) ex-warehouse. Meanwhile, local offers for domestic grade 60 rebar have been heard at around PKR 237,000-240,000/mt ($1,017-1,030/mt) ex-works, up by PKR 4,000-7,000/mt ($17-30/mt) over the past two weeks depending on the supplier. However, according to market participants, the Pakistani market is not ready to absorb higher rebar prices, due to slow construction works amid the heavy monsoon season and the revision of projects’ viability, coupled with the political instability in the country.
All prices on Pakistani rupee basis include 17 percent VAT.
$1 = PKR 233