Business activity in Pakistan is currently slowing down owing to all-time-high interest rates of 21% and a lack of financing avenues for non-ferrous scrap buyers and mills to conduct sustainable business. And with the government’s tight monetary policy, buyers have largely disappeared, with a steep drop in finished product sales affecting all sectors of business. Largely as a result of high levels of inflation, the government is adopting more of a savings approach.
Copper scrap supply in Pakistan looks tighter on the slow performance of the import sector owing to reduced supply, mainly from the USA and Europe from where scrap volumes have been affected since the winter months.
High interest rates are making it harder to secure finance while volatile exchange rates are creating difficulties in pricing business and in finding buyers for finished products at the same time. However, aluminium is showing signs of growth, with strong demand from the domestic industry. Regarding the major global shift from copper to aluminium in various products, the same in Pakistan is supporting the aluminium market and keeping prices up at stable levels.
The export market, mainly to China, is weaker than before and creating concern for domestic smelters. Pakistan will soon be receiving major consignments of Russian oil that will provide domestic smelters with a cheap and stable energy source. However, future business activity in Pakistan is reliant primarily on political stability and the fine-tuning of business policy.