Despite strong demand, ferrous scrap trades in Pakistan were limited on Tuesday. Buyers are in ‘wait-and-watch’ mode awaiting clarity on price direction. Cash flow concerns for mills continued and most buyers want to confirm before restocking, that another price hike claimed by recyclers in the US domestic market could replicate even in the Asian markets in January.
Domestic steel prices continued to rise in Pakistan. But the weakening US dollar against Asian currencies and the Chinese resumption of ferrous scrap imports kept buyers uncertain about the market direction.
The daily Davis Index for containerized shredded, Tuesday, inched down by $0.75 to $470.5/mt cfr Port Qasim from prior Monday as silence from suppliers persisted. There were very few offers at $465-470/mt cfr Port Qasim on healthy demand. Traders expect a further hike in scrap prices in the coming days following global cues. Should Turkish mills start bulk purchases for their remaining February shipments, prices would rise further.
The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $448/mt cfr Port Qasim, down by $1/mt from Monday. UAE suppliers were not interested to offer HMS to Pakistan as buyers preferred other grades. Offers were above $450-455/mt cfr Port Qasim for containers of mixed #1 HMS and P&S sarya against bids of $445-450/mt cfr Qasim.
The daily index for US-origin HMS 1&2 (80:20) settled at $448.21/mt cfr Port Qasim, down by $3.04/mt from Monday in absence of trades and low bids from mills. Offers from suppliers were firm while containers shortage pushed up freight rates, resulting in very limited deals containerized scrap over a the past few months.
Billet and rebar
Domestic billet prices were firm, driven by high imported scrap prices. On Tuesday, prices for domestic Bala billets were unchanged at PKR106,500-107,500/mt ex-works. In Karachi, all major rebar makers hiked prices citing high ferrous scrap prices in the international market.
A major mill kept rebar asking rates at PKR134,500-135,500/mt ($837-841/mt) ex-works Karachi for 12-32mm rebar. Industry associations have already appealed to the government to make necessary changes in tax structure to ensure prices come to normal levels soon.
On Tuesday, HMS and P&S offered at around PKR86,000-86,500/mt ex-yard Lahore. Pure Q Toke (shredded) traded at PKR87,000-87,500/mt, up PKR500/mt ex-yards amid rising demand and low availability. Offers for scrapped vessels remained flat at $430-450/ldt cfr Pakistan.