Pakistan: Scrap imports under pressure as weak demand and price volatility curb buying

• Buyers stay on sidelines on low mill utilisation
  
  
• Domestic scrap gains support amid import constraints
  
  

Imported scrap activities in Pakistan remains slow, with prices inched-down w-o-w as buyers stay cautious amid ongoing uncertainty around the Middle East situation. Market participants noted that most mills are holding back, and meaningful buying is unlikely until there is clearer direction on geopolitical developments. European-origin shredded scrap assessment stood at $427/t, down by $4/t w-o-w.

Imported shredded scrap continues to be offered around $430/t CFR, while buyers are more comfortable at $420-422/t due to weak demand. UK/EU-origin offers remain at similar levels, with shipment timelines of 30-35 days. Mill utilisation is low at around 35-40%, with some mills leaning more on domestic scrap to manage LC-related constraints, which in turn is tightening local availability and supporting prices.

Market comments

A UK-based supplier noted that Pakistani buyers reacted quickly after the ceasefire news, with bids for shredded around $420/t CFR. However, sellers remain firm, supported by strong recent bookings and healthy order books. "We are not in a rush and are waiting for clarity on the Middle East situation," the supplier said. Shredded offers were near $425-428/t CFR until last Friday, with prices now fluctuating daily.

Short-transit cargoes from Malaysia/Singapore for April shipment to SAPT (Karachi) were also heard, including shredded at $445/t and HMS bundles at $410/t. Local buying levels in UK were indicated at GBP 265/t ($355/t) exw, with freight around $1,550/container.

As per a Peshawar-based steel mill, local scrap prices are currently around PKR 162,000-165,000/t ($581-592/t), rising due to a shortfall in imports. Imported shredded scrap is heard at $428-430/t CFR.

Mill utilisation remains low at around 40% and domestic billet prices are reported at PKR 225,000/t ($807/t), rebar at PKR 255,000/t ($914/t), and bala at PKR 210,000/t ($753/t). The mill added that no major imported volumes have been booked recently due to ongoing price fluctuations and market uncertainty.

As per a Karachi-based steel mill source, billet prices are reported at PKR 222,000-226,000/t ($797-811/t), rebar at PKR 250,000-255,000/t ($897-914/t), and bala at PKR 210,000/t ($753/t). Local scrap prices are heard at PKR 155,000-160,000/t ($556-574/t).

Pakistan's ship recycling market remained stable, supported by firm steel plate prices at $634-638/t and a relatively steady rupee, keeping Gadani competitive within the sub-continent.

The yard continued to benefit from its proximity to Gulf-origin tonnage amid ongoing regional disruptions, supporting consistent inflows. The presence of three HKC-compliant yards, with additional facilities under development, is further strengthening Pakistan's position as an alternative to India. Meanwhile, inflation edged slightly higher but remained manageable, with limited impact on overall yard economics.

Outlook

In coming days, the market is expected to remain muted, with weak demand, low mill utilisation and concerns around ogoing geopolitical developments continuing to weigh on buying sentiment, while limited imports are likely to keep domestic scrap prices supported.