Key price movement
The KCA spot benchmark opened the week at PKR ***.**/kg on Monday, June **. It dropped to PKR ***.**/kg on Tuesday and remained at that level for the rest of the week. The decline occurred in a single trading session rather than through a series of gradual adjustments, indicating a market response to a specific policy event instead of evolving supply-demand fundamentals. The absence of any rebound during the week suggests that market participants quickly accepted the new price level.
Why prices moved
The timing closely aligns with Pakistan**;s captive-power gas tariff reset, which took effect on July *. The revised structure set the base tariff at PKR *,***/MMBtu, while a supplementary levy lifted the effective cost to approximately PKR *,***/MMBtu, significantly increasing energy expenses for mills operating captive power plants. Since captive gas is the primary energy source for many large Pakistani spinning mills, the increase directly affects production economics.
