According to the Pakistan Bureau of Statistics, scrap imports in Pakistan have experienced a significant YoY decrease of almost 50pct, with a total of 121,877 tons imported in June 2023. This quantity represents the second-lowest figure for the year.
Comparatively, Pakistan had imported 241,393 tons of scrap in June 2022, illustrating a substantial drop in recent statistics.
In the first half of the year, Pakistan’s scrap imports plummeted by 53pct YoY, amounting to 839,282 tons.
The primary factor contributing to the decline in scrap imports is the weak demand for rebar, resulting from Pakistan’s severe economic crisis. However, in a positive news, International Monetary Fund (IMF) has approved a USD 3 bln loan agreement for Pakistan to help stabilize its troubled South Asian economy.
The Pakistani economy has been struggling, facing a severe balance of payments crisis with central bank reserves that can barely cover a month’s worth of controlled imports. The IMF projects that the import cover will increase to 1.4 months in fiscal year 2024.
Pakistani buyers have informed MEsteel that banks are now granting approvals for deferred LC payments in steel and scrap imports. While it is becoming relatively easier to open Letters of Credit (LCs) for deals involving 500-1000 tons, obtaining approvals for larger tonnages remains challenging.
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