Pakistani ferrous scrap importers were silent on Wednesday as prices showed signs of softening on weak global cues. A decline in domestic billet prices and limited sales for rebar after a recent price hike of PKR3,000/mt also dampened sentiment. Still, sellers kept offers firm amid the limited availability of material for containerized trade since many have already secured bulk shipment orders.
Pakistani currency also depreciated against US Dollar to settle above PKR157.11 on Wednesday against $1 from PKR155.7 a week ago.
Following a marginal decline in Turkish bulk prices, Pakistani mills either turned silent for purchases or lowered bids. The daily Davis Index for containerized shredded, Wednesday, inched down by $1.25/mt to $535/mt cfr Port Qasim. On Tuesday, few containerized trades for the UK/EU-origin shredded were reported in the range of $535-540/mt cfr Qasim. But on Wednesday buyers refused to accept offers of $540-545/mt cfr Port Qasim. The monsoon season could also keep many small-scale mills away from the market.
In Turkey, the daily Davis Index for imports of US-origin HMS 1&2 (80:20) on Tuesday declined by $3.49/mt to $503.48/mt cfr Turkey. Domestic billet prices declined by $10/mt, while rebar export offers remained firm.
Chinese iron ore prices paused rally to settle down by $7.8/mt to $214/mt cfr north China for 62pc Fe content on Wednesday.
Sellers from UAE lowered their offers marginally for HMS scrap. The Davis Index for UAE-origin HMS 1&2 (80:20), Wednesday, settled down by $2/mt at $503/mt cfr Port Qasim. Trades for UAE-origin mixed #1 HMS and P&S were reported at $510/mt cfr Port Qasim. Buyers opted for shredded scrap over HMS material since the latter invokes an additional 3pc import duty.
The daily index for US-origin HMS 1&2 (80:20), Wednesday, settled unchanged at $505/mt cfr Port Qasim. Container freights rates could go up further and add to landed costs for importers. Cast iron rotors were offered above $525/mt cfr Qasim, with no buyers at those levels.
Finished steel offers were firm, however, sales took a hit because of the monsoon lull in the construction sector. In the domestic market, Bala billet traded at PKR116,200-116,500/mt ex-works, losing PKR200-500/mt from a day ago.
Offers for local rebar were at PKR131,000/mt ex-works. Medium-scale steelmakers sold rebar at PKR145,500-146,000/mt ex-works Karachi and PKR144,000-144,500/mt ex-works Punjab.
On Wednesday, asking prices for Art Q toke scrap (equivalent to a mix of HMS and P&S) and Pure Q toke scrap (equivalent to shredded) were at PKR94,800/mt and PKR95,800/mt ex-yard Lahore, respectively, up by PKR800/mt from Tuesday. Market participants are still waiting for clarity on the impact of budget FY2021-22 announced on June 11. A reduction or removal of customs duty, additional customs duty, and regulatory duty on imports of the hot-rolled coil and hot-rolled stainless steel could boost imports.
($1=PKR157.11)