Pakistani mills are waiting for clarity in the global price direction before booking more material. Mills were unwilling to match present firm offers amid slow domestic steel sales. Despite peak construction season, demand has failed to recover as expected. Amid tight supply and high freight rates, most expect prices to rise in the near term.
Mills with limited inventories could be in the ferrous scrap market in the coming days. HRC makers in the country were buoyed by a jump in Chinese iron ore and HRC prices by $10-15/mt despite New Year Holidays. Mills are thus likely to accept firm ferrous scrap offers.
The daily Davis Index for containerized shredded, Tuesday, inched up by $1.25/mt to $396.25/mt cfr Port Qasim. Most suppliers offered containerized shredded at $395-405/mt cfr Port Qasim. Freight prices on the New York-Pakistan have increased by $10/mt for TEUs. Around 2,000mt of UK/EU origin shredded was sold at $393/mt cfr Qasim on Monday.
The daily index for US-origin HMS 1&2 (80:20) settled at $368.93/mt cfr Port Qasim, down by $3.57/mt. In the US domestic market, settlements for February trades finalized at prices lower by $50-60/gt from January reducing the possibility of a further drop in global prices. Prices in South Asia which were already trailing behind global levels are unlikely to fall further with global prices showing signs of stability soon.
Trades for #1 HMS and P&S of UAE-origin were in the range of $370-375/mt cfr Port Qasim, depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20), Tuesday, dropped by $1/mt to $365/mt cfr Port Qasim. Some UAE sellers refused to lower offers as they hoped for prices to rebound once Turkish mills resume bulk trades.
Domestic scrap drops on low ship breaking offers
Shipbreaking offers in Pakistan dropped this week amid rising supply and limited buyers in the market. For shipbreakers, scrapped vessels were offered at prices down $20-25/mt from the prior week. Ship-breaking scrap was priced at $360-370/mt ex-Gadani yards.
After active demand for rebar from late last week until Monday, the market took a breather on Tuesday.
Domestic steel prices and sales are under pressure with buyers reluctant to book material. In Lahore, G-60 billet traded at PKR104,000-105,000/mt ex-works. Prices for Bala billet were heard at PKR95,000-96,000/mt ex-works on Tuesday.
Offers for Art Pure Q toke scrap equivalent to a mix of HMS and P&S were at PKR76,500-77,500/mt ex-yard Lahore amid tight domestic scrap supply.
($1=PKR160.20)