Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Pakistan’s domestic steel demand continued to pick pace, lifting spot steel prices. Rising billet, local rebar and domestic scrap prices encouraged ferrous scrap importers to match firm offers. 


Pakistan being the most active market, attracted the attention of most yards amid bearish sentiments in the Indian subcontinent. Major mills including Amreli and Agha Steel recorded the highest ever monthly sales in June, boosting the appetite of Pakistani buyers. Sentiments could dampen with the arrival of monsoon in the coastal areas around mid-July. 


Amid stable demand, prices for imported HMS in Pakistan showed a marginal lift. The daily Davis Index for UAE-origin HMS 1&2 (80:20), Tuesday, settled at $490/mt cfr Port Qasim, up by $2/mt from a day prior. Deals for UAE-origin HMS 1&2 (80:20) reported at around $490-495/mt cfr Qasim, while trades for mixed #1 HMS and P&S at $500-505/mt cfr Port Qasim. 


On Tuesday, offers for domestic Art Q toke scrap (equivalent to a mix of HMS and P&S) rose above PKR97,300-97,800/mt ex-yard Lahore while Pure Q toke scrap (equivalent to shredded) traded in the range of PKR99,300-99,800/mt ex-yard Lahore, rising by over PKR2,000-2,500/mt from Friday. Due to a slow pace of demolition and ship-breaking activities, domestic scrap prices trended up. 


The daily Davis Index for containerized shredded, Tuesday, was unchanged at $537.5/mt cfr Port Qasim. Deals slowed but continued at the steady levels of $535-538/mt cfr Qasim. A few sellers are still waiting with offers over $540/mt cfr Qasim amid tight containers availability and hopes of a demand recovery in China and Turkey. On Tuesday, spot steel prices in China rose CNY50-100/mt, while Turkish domestic rebar prices were elevated by $10/mt from the prior week. 


The daily index for US-origin HMS 1&2 (80:20), Tuesday, settled unchanged at $501.25/mt cfr Port Qasim from Monday. In the US and European domestic markets, steel prices remained stable while scrap prices rose by $30/gt in early July monthly settlements amid healthy demand for ferrous scrap.


Domestic billet up on higher scrap

Amid a tight supply of ferrous scrap and the resulting rise in input costs, steel prices rose in Pakistan. Domestic Bala billet prices jumped by upto PKR3,000/mt from Friday on improved demand. On Tuesday, offers rose to PKR124,500/mt ($780/mt) ex-works. Offers for G-60 billet at PKR133,500-134,000/mt ex-works Punjab.


Major rebar producers in the North and South look to raise prices further. On Tuesday, rebar prices were unchanged at PKR150,500/mt ex-works Karachi and PKR149,500/mt ex-works Punjab. Participants believe that the market has absorbed the recent price hikes. Local rebar offers are above PKR137,000-137,500/mt ex-works Lahore.


A gap between steel prices in the global market and Pakistan could help steelmakers raise prices. Also, the Pakistani rupee has depreciated to PKR159.06 against US Dollar from PKR156.9 on July 4, which increases import costs. 



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