How Imported Scrap Actually Reaches Shershah

Some of the metal traded at Shershah on any given day was scrap somewhere else in the world before it ever reached Karachi. Understanding roughly how that material enters the country helps explain why import-linked materials, steel especially, sometimes move for reasons that have nothing to do with local supply at all.

Karachi Port and Port Qasim are the entry points

Bulk scrap imports, mainly steel and iron for Pakistan's re-rolling mills, arrive through Karachi Port and Port Qasim, the same ports handling the country's general shipping trade. This is separate from the Gaddani ship-breaking yard, which produces scrap from whole vessels being dismantled rather than scrap shipped in as cargo, though both eventually feed into the same downstream steel and iron market that Shershah trades in.

Customs clearance and bonded warehousing

Imported scrap has to clear customs like any other cargo, which includes inspection for prohibited material (certain hazardous waste categories, for instance) and duty assessment. Large shipments often sit in bonded warehouse facilities near the port while this clearance completes, and the pace of that clearance process, which can vary with customs workload and documentation issues, affects how quickly a given shipment actually reaches buyers and mills inland.

Why this matters even for household-scale sellers

If you're selling a few kilos of scrap from home, none of this touches you directly. But the price you're quoted for iron and steel specifically is set against a backdrop that includes how much imported material is currently clearing customs and reaching mills, alongside Gaddani's ship-breaking output and everything covered in our piece on why Gaddani moves Karachi prices. A slowdown in port clearance, for whatever bureaucratic reason, can tighten supply and firm prices in a way that looks identical, from a seller's perspective, to any other supply shock.

The exchange rate connection

Imported scrap is priced and often invoiced in dollars before conversion, which means the rupee's exchange rate against the dollar directly affects what imported steel scrap costs once it's landed and cleared. This is part of why we publish the day's USD/PKR rate alongside metals that have a global anchor: local Karachi prices for import-linked materials do move with the exchange rate, not just with metal markets.