While occasional deals in the global scrap market have been done at higher prices during the past weeks, import offers for shredded 211 scrap of UK and European origin in containers to Pakistan have staged a corresponding rebound. However, buying activity has been to some extent constrained due to continuous problems with opening letters of credit (LCs) and the insufficient demand for finished steel in the country.
Accordingly, this week offers for ex-UK/EU shredded scrap in containers to Pakistan have been voiced at $410-415/mt CFR, up by $10/mt week on week. “Several traders have reported offers at as high as $420/mt CFR, but this level is totally exaggerated and not real so far,” a market insider told SteelOrbis. At the same time, following several deals for at least 5,000 mt in total signed at $405/mt CFR on average at the end of last week, this week customers’ bids have remained at $405/mt CFR level, according to sources.
“The acceptable level is still below $410/mt CFR because of slow demand for finished steel locally, which may pick up ahead of the general elections next year. Also, buyers are not accepting higher prices due to the shortage of funds,” another market sources said.
In the local market, offers for scrap equivalent to shredded have continued to increase as well, reaching around PKR 172,000/mt ($609/mt) ex-warehouse, up by PKR 19,000/mt ($67/mt) on average week on week.
Meanwhile, due to recent fluctuations in operational costs, the depreciation of the Pakistani rupee and low steel sales, leading Pakistani rebar producers have adjusted their prices upwards by at least PKR 6,000-7,000/mt ($21-25/mt) over the past week to PKR 266,000-270,000/mt ($941-955/mt) ex-works for new orders from November 6-7.
All prices on Pakistani rupee include 17 percent VAT.
$1 = PKR 282.65