Pakistani mills were active in the seaborne scrap market despite a sharp rise in offers. In earlier weeks, supplier yards had either withdrawn offers from the market, kept firm asking prices, or stayed completely silent due to the unavailability of scrap amid seasonal woes and COVID-19 lockdowns.
Early this week, mills were unwilling for purchases with prices gaining around $5-10/mt daily. But suppliers refused to lower prices citing a decrease in scrap collection rates and resulting shortage at yards. In the coming days, prices could reach $450/mt cfr Port Qasim for shredded, believe traders.
The daily Davis Index for containerized shredded, Friday, rose by $3.21/mt to $415.71/mt cfr Port Qasim. Prices increased by $14.46/mt from the prior week. A few trades for shredded were heard at $415/mt cfr Port Qasim. But on Friday, offers were at $420-435/mt cfr Port Qasim.
In Turkey, mills have resumed bulk purchases for remaining March and April shipments paying $410/mt cfr Turkey for HMS 1&2 (80:20). But trading remains slow as suppliers offered limited volumes in hopes of Chinese demand picking up after new year holidays boosting scrap and steel prices. Rebar prices in Turkey rose as the domestic demand picked up.
The daily index for US-origin HMS 1&2 (80:20) settled at $382.5/mt cfr Port Qasim, up by $3.75/mt. Rebound in scrap prices in the US fas market by around $10-15/mt pushed offers up in South Asian markets. Only a few yards were in the Pakistan market offering containerized HMS 1&2 (80:20) at $400-405/mt cfr Port Qasim levels for March deliveries due to elevated container freight charges.
Last week, UAE-origin HMS was the most viable import option with offers lower by $20/mt than the material from other origins. This week, however, offers from the UAE rose to close this gap and match global levels. Offers for #1 HMS and P&S from UAE were at $390-400/mt cfr Port Qasim, depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20), Friday, rose by $7/mt to $383/mt cfr Port Qasim.
The weekly Davis Indexes for P&S 5ft and #1 busheling settled at $419/mt and $443/mt cfr Port Qasim, up by $4/mt and down $2/mt, respectively. The gap between premium grades and medium grades is expected to widen on limited supply amid declined collection rates. Offers for #1 busheling were at $440-445/mt cfr Port Qasim. But buyers refused to accept these levels.
Domestic scrap and billet rebound, sales slow
The Davis Index for G-60 billet settled unchanged from Feb 5 at PKR105,500/mt ex-works Punjab. In Lahore, G-60 billet traded at PKR105,000-106,000/mt ex-works. The weekly index for domestic Bala billet rose by PKR750/mt to PKR96,750/mt ($609/mt) ex-works, prices rose by a total of PKR2,500-3,000/mt from their bottom in late January following rising imported scrap prices.
The weekly Davis Index for rebar dropped by PKR2,500/mt to PKR127,000/mt ex-works Karachi, while in Punjab, the index decreased by PKR2,000/mt to PKR124,000/mt ex-works. Local rebar traded at PKR108,000-110,000/mt ex-works depending on delivery terms.
Domestic scrap uptick on high imported scrap
The weekly index for Art Pure Q toke scrap equivalent to a mix of HMS and P&S Friday increased by PKR1,000/mt ($8/mt) to PKR78,250/mt ex-yard Lahore. The weekly index for Pure Q Toke equivalent to shredded increased by PKR1,000/mt to PKR80,000/mt ex-yards.
Small mills using ship plates for the production of rebar could not maintain their profit margins with the market unable to absorb the rise in rebar prices. With prices declining for rebar in the past few days, most are left with expensive stocks in hand. Ship plates are priced at PKR93,000-94,000/mt ex-yards while rebar prices are at PKR108,000-110,000/mt ex-works.
But large mills like Amreli, Agha, and Faizan Steel in Southern regions could sell at higher prices. With technological advancement, these mills have lowered their conversion costs, impacting small furnaces state traders.