Import scrap offers to Pakistan have continued to move up at a rapid pace due to the bullishness of global scrap suppliers, following their success in receiving higher prices in deals to Turkey. However, deals have remained occasional in Pakistan, as the curbs on the opening of letters of credit (LCs) have significantly affected production activities.
Specifically, while at the beginning of the week a few deals for a small tonnage of ex-UK shredded scrap were reported to have been done to Pakistan at $445-447/mt CFR, up by $10-15/mt week on week, by the middle of the week most offers have reached $450-455/mt CFR, compared to $430-440/mt CFR at the end of last week. Some market sources believe that by the end of the week import offers will hardly be below $460/mt CFR, considering the recent developments in the international market.
At the same time, Pakistani mills have been demanding that the government take urgent measures to address the issue of the delay in opening of LCs for steel imports, as, due to the non-release of import documents and consequent non-availability of raw material, many steel mills are on the verge of closure. “If this issue is not solved as soon as possible, we expect a further increase in rebar prices to around PKR 230,000-240,000/mt ($1,024-1,069/mt), up by PKR 30,000/mt ($134/mt),” a market insider said.
All prices on Pakistani rupee basis include 17 percent VAT.
$1 = PKP 224.57