Pakistani ferrous scrap importers stepped back from purchases on Tuesday amid softening global cues. Most sellers kept offers firm citing elevated containerized freight rates on tight container availability. Buyers, however, were unwilling to negotiate at present levels as they believe prices could drop $10/mt in the next few days.
Weak domestic steel sales and falling Chinese steel prices weighed down sentiment in the Pakistan market. In China, iron ore prices continued the downward movement amid the government probe over speculation and hoarding. Iron ore prices with 62pc ferrous content dropped were at $206.5/mt cfr north China, dropping from a peak of $220/mt cfr China recorded on June 17.
The daily Davis Index for containerized shredded, Tuesday, inched down by $3.75/mt to $531.25/mt cfr Port Qasim. Only a few offers sellers reduced their offers for containerized UK/EU origin shredded by $3-5/mt to $532-535/mt cfr Qasim. Turkish bulk scrap buying has also slowed with mills targeting lower bids. The daily Davis Index for imports of US-origin HMS 1&2 (80:20) was at $498.75/mt cfr Turkey; down by $1.25/mt.
The Davis Index for UAE-origin HMS 1&2 (80:20), Tuesday, settled at $493/mt cfr Port Qasim, down $4/mt. Deals for UAE-origin mixed #1 HMS and P&S were at $503-505/mt cfr Port Qasim. Pakistani importers lowered bids amid declining buying interest in India.
The daily index for US-origin HMS 1&2 (80:20), Tuesday, settled at $507.5/mt cfr Port Qasim, down by $1.5/mt from Friday. However, for July settlements, suppliers could target another $30-50/gt rise for prime grades. But for HMS and shredded, prices are expected to stay flat to up.
In the Pakistan domestic market, steel prices have started to stabilize after an initial drop. Trading too resumed as prices dropped to match buyers’ interests. Offers for Bala billet were at PKR116,000-116,300/mt ex-works Punjab. For rebar, asking rates were unchanged at PKR145,500/mt ex-works Karachi and PKR144,000/mt ex-works Punjab.
A few yards were looking to sell off material before the financial year closes on June 30. For Art Q toke scrap (equivalent to a mix of HMS and P&S) and Pure Q toke scrap (equivalent to shredded), on Tuesday, offers were firm at PKR94,000-94,300/mt and PKR95,000-95,500/mt ex-yard Lahore, respectively.
Pakistan Association of large-scale producers (PALSP) has raised concerns over the withdrawal of 17pc Federal Excise Duty for steel producers in the former FATA/PATA tribal area. They state the move could lead to annual tax revenue losses estimated at PKR50bn.
($1=PKR157.32)