Pakistan: Imported Scrap Offers Inch Up; Trade Activities Slow Down
In recent conversations with industry participants, SteelMint learned that imported scrap offers to Pakistan have recovered moderately after touching record low levels last week, as strengthening in the global market is making suppliers less inclined to sell at low prices.
Trade activities remained comparatively slow this week after the active restocking by mills in last 2-3 weeks, with a mismatch in offers and buyers’ expectations keeping the market slow. Domestic market continued to witness low demand, amid a slight increase in finished steel prices
SteelMint’s assessment for containerized Shredded 211 scrap from US, Europe and UK stands at USD 315-320/MT, CFR Qasim, up by around USD 7-8/MT against last week’s report, with few deals being concluded in this range. Offers mostly remained at around USD 317-320/MT, but lower buying interest kept trades limited. Some leading recyclers withheld their offers and kept away from trading activity, on account of non-viability of the current low prices in the market.
Assessment for Dubai origin HMS stands at around USD 300-305/MT, CFR, depending on quality, with some low volume bookings being recorded this week. UK origin HMS 1&2 remained at around USD 295/MT, CFR Qasim, but the number of offers remained scarce.
Pakistani Rupee remained rangebound and stood at around 159-160 levels against USD this week.
Domestic steel market remains slow, prices inch up - Domestic market remained slow in terms of finished steel sales on low demand, in addition to which the new STRN (Sales tax Registration Number) rules by the FBR has slowed down the trades. As per new rules in the sales tax procedure, the GST applicable for the registered companies (having STRN) will be 17%, while it is 20% for non registered companies (without STRN), thus creating confusion among the end users.
The recently imposed 17% FED on the FATA-PATA based steelmakers, was asked to be reconsidered by mill owners based in these regions, however it was reported that PSMA’s former Chairman Mian Iqbal Tariq has advocated for continuation of the FED imposition in tribal areas also, in order to bring all steel mills at level playing field, and urged PM Imran Khan for the same.
With a slight increase in prices, average rebar selling prices for Northern region’s steel mills is assessed at around PKR 116,000-117,000/MT, ex-works (USD 723-729) rising by PKR 1000/MT against last week, while Southern (Karachi region) steel mills have kept rebar offers at around PKR 118,000/MT, ex-works which are likely to increase further on rise in construction materials' prices. Assessment of CC billet G-60 stood at PKR 96,000-97,000/MT (USD 598-604) while local scrap price increased to PKR 67,000/MT ex-works.
source: SteelMint
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