The Davis Index for US-origin containerized shredded settled at $285/mt cfr Port Qasim on Friday, down $1/mt from Thursday but $7/mt lower than the prior week. Despite strong demand and active trading, scrap prices dropped late in the week in line with global cues.
Trade and manufacturing activities gained momentum in June but a fast-paced spread of COVID-19 pandemic is expected to slow things in Pakistan. Few traders booked scrap in the last few days as the government imposed targeted lockdown measures in many regions.
Early in the week, trades for shredded concluded at $288-290/mt cfr Qasim that subsequently dropped to $285/mt cfr Qasim on Friday. Turkish bulk import prices dropped on indications of a softness in the US domestic market in July. Imported ferrous scrap prices are likely to move down on normalising supply for shredded and busheling.
The Pakistan government presented its budget for the fiscal year 2020-2021 which includes an additional customs duty (ACD) of 2pc on steel scrap imports and a lowering of tax on raw material arriving at ports to 2pc from 5.5pc earlier. These provisions could benefit importers in the near term.
The Davis Index for HMS 1&2 (80:20) of UAE-origin settled at $268/mt cfr Qasim, down $2/mt from Thursday but down by $5/mt from a week ago. The Davis Index for UAE-origin #1 HMS settled at $275/mt cfr Port Qasim, down $5/mt from the prior week. UAE-origin super scrap or a mix of #1 HMS and P&S was traded at $270/mt cfr Qasim.
Most South African suppliers are still struggling with export permit issues. With a few trades for South African HMS 1&2 (80:20) were reported at $265/mt cfr Qasim, marginally down from the prior week. The index for US-origin HMS 1&2 (80:20) was at $272/mt cfr Qasim, down $1/mt from Thursday but down by $4/mt from the prior week. Most US yards held their offers stable at $275/mt cfr Qasim for HMS 1&2 (80:20), however, prices could come under pressure following global cues.
The weekly Davis Index for HMS 1&2 (80:20) from the UK and Europe Friday settled at $260/mt cfr Qasim, down by $1/mt. Offers from European yards were at $260-265/mt cfr Port Qasim while bids were at $255/mt cfr Qasim. The index for Latin American HMS 1&2 (80:20) settled at $255/mt cfr Qasim, down by $5/mt from the prior week, a few trades closed at the index prices.
The Davis Index for P&S settled at $285/mt cfr Port Qasim, down by $3/mt from the prior week. Trades for UK-origin P&S were at $285-290/mt cfr Qasim this week. The Davis Index for busheling was at $298/mt cfr Qasim, down $14mt from the prior week. Trades for busheling concluded at $295-300/mt cfr Qasim.
Pakistan’s domestic steel prices
Domestic steel market in Pakistan was upbeat following budgetary announcements. Billet prices rose sharply during the week but dropped slightly on Friday. The weekly Davis Index for commercial Bala billet settled at PKR90,500/mt ex-yards Punjab, inclusive of local taxes, down by PKR500/mt from the prior week. The Davis Index for G-60 billet settled at PKR95,000/mt ex-Punjab plant, also down by PKR1,000/mt from the prior week. In the northern region, offers for Bala billets were heard at PKR92,500-93,000/mt ex-yards Punjab on active trades.
The Davis Index for G-60 rebar settled unchanged at PKR112,000/mt ($673/mt) ex-plant Karachi and those at PKR111,000/mt ex-plant Punjab, down by PKR500/mt from the prior week.
Domestic ferrous scrap prices in Pakistan, however, remained flat this week. The weekly index for Art Pure Q equivalent to shredded settled at PKR67,500/mt ex-works. Offers for domestic mixed HMS and P&S scrap were at PKR68,500/mt delivered mill, unchanged from the prior week.