Pakistan has 3 main seaports for importing scrap, located in the Indian Ocean. They are Karachi Port, Muhammed Bin Qasim Port and Gwadar Port. The two busiest ports for Pakistan ferrous scrap imports would be Karachi and Qasim Port.
In Pakistan, there is a growing and well-established steel manufacturing industry. Local steel production capacity is estimated to be close to 4.5 million tons in 2019.
Steel scrap is used in electric arc furnaces, where steel is melted using electricity to make new production steel, instead of producing new metal using iron ore, coal, and limestone. For example Pakistan, Turkey and India are key importers for global scrap, as their big network of electric arc furnace mills, which produce steel for much of the Middle East region. Global shipping of scrap and international steel supply chains mean that a new skyscraper in Dubai could start off as a demolished building in the UK.
This growth goes hand in hand with increased public spending and construction to Pakistans infrastructure and economy, raising the demand for finished steel products.
While the growth in steel is a good economic indicator, Pakistan is still behind many countries in steelmaking as the below chart shows.
To support steel mill production it is necessary for ferrous scrap metal to be imported into Pakistan to be used as a vital raw material for the steelmaking process.
What types of scrap metals are imported by Pakistan?
- The most common grades of ferrous scrap metal imports to Pakistan include heavy melting scrap, shredded steel scrap, plate and structural scrap (P&S), and re-rolling scrap.
- Tiger International Limited is also a key shipper to Pakistan of HR trimming scrap, also know as Bobbin scrap, edge cutting scrap and hot-rolled coil cuttings.
- Different grades of scrap metal are suitable for different manufacturing techniques adopted by the steel mills to make new end products.
- For example, cast iron scrap can be used to make new cast iron valves used in water management or cooking utensils.
- Apart from ferrous scrap metal, Pakistan imports non-ferrous scrap also, such as used compressors and electric motors.
Pakistan’s need to import scrap metal to support its steelmaking industry is no different from other developing nations in Asia.
Countries such as Malaysia, Indonesia, Vietnam, Taiwan and India all rely on importing scrap metal depending on market conditions, grades of scrap and their own internal factors.
However, Pakistans reliance on scrap metal may not last forever.
As what is now happening in China it is now entering what is called a “scrap cycle”, where it’s first-generation manufacturing, construction and other industries are now being recycled, increasing the amount of domestic scrap produced.
For now scrap metal is an important import for Pakistan to support its steel making industries and growth of its economy while playing an important role in the recycling of scrap metal from developed nations.